Archive for the 'news' Category

16
Mar

Dodd Lays Out Details of Financial Overhaul Bill

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WASHINGTON — Senate Democrats, with the backing of the Obama administration, took a big step forward on Monday toward adopting the most sweeping overhaul of financial regulations since the Depression, calling on Republicans to join them to adopt the measure in the thick of an election year.

Exactly 18 months since Lehman Brothers filed for bankruptcy, setting in motion a financial crisis that required a federal bailout of unprecedented scope, the chairman of the Senate Banking Committee laid out a bill that aims to ensure stability for the financial system; close regulatory loopholes that had allowed excessive risk-taking; and protect consumers from the kinds of abusive loans that brought down the housing market.

The bill would enshrine Washington’s role in policing Wall Street, creating a nine-member council, led by the Treasury secretary, to detect systemic risks to the markets and placing the Federal Reserve in charge of all of the nation’s largest and most interconnected financial institutions.

The banking committee chairman, Christopher J. Dodd, Democrat of Connecticut, noted that negotiators from the two parties were not far apart when he announced last week that Democrats would proceed with their own bill.

“We will have financial reform adopted this year in the Congress of the United States,” Mr. Dodd said.

Even so, the measure’s prospects remained far from certain.

The major flashpoints will include, among other things, the scope of authority for a new Consumer Financial Protection Bill to be established within the Fed; the scope of exemptions under new rules governing the trade of derivatives; and the mechanism by which the government could seize and dismantle a large company on the verge of failure.

Another provision is one intended to curb Wall Street’s influence over the Federal Reserve Bank of New York. Its president would be appointed by the president of the United States, not by a board that includes representatives of member banks business card design.

Mr. Dodd estimated that there was substantial bipartisan agreement on 9 of the bill’s 11 titles, the exceptions being consumer protection and corporate governance.

The bill “reflects an awful lot of work that has gone on between Democrats and Republicans on this committee,” Mr. Dodd said, taking pains to praise the top Republican on the committee, Senator Richard C. Shelby of Alabama, and another member, Senator Bob Corker of Tennessee, who had spearheaded Republican negotiations in recent weeks.

The bill quickly attracted praise from observers — if not lawmakers — on both sides of the aisle.

“This will ensure that large financial institutions face the same resolution process as small banks and eliminate the possibility of future government bailouts,” said Sheila C. Bair, a Republican who is chairwoman of the Federal Deposit Insurance Corporation.

Elizabeth Warren, a Harvard law professor who is chairwoman of the Congressional Oversight Panel that oversees the Troubled Asset Relief Program, said in a statement, “Despite the banks’ ferocious lobbying for business as usual, Chairman Dodd took an important step today by advancing new laws to prevent the next crisis. We’re now heading toward a series of votes in which the choice will be clear: families or banks.”

Douglas J. Elliott, a former investment banker and now a fellow at the Brookings Institution, said the proposal appeared to “represent a major improvement to the status quo, but political compromises significantly diminish its effectiveness compared to an ideal set of reforms.”

Dodd Lays Out Details of Financial Overhaul Bill

14
Mar

Retail sales rise as shoppers fight winter blues

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WASHINGTON (Reuters) – U.S. retail sales rose unexpectedly last month despite heavy snow storms that were thought to have kept shoppers at home and bolstered hopes of a sustainable economic recovery.

Optimism about Friday's report was tempered by a slip in consumer confidence early this month. Worries about stubbornly high unemployment held back sentiment, even though the economy appears to be on the cusp of creating jobs.

"The manufacturing recovery is starting to broaden out to the key consumer area of the economy. Consumers are keeping up their end of the bargain to ensure the recovery from recession is a sustainable one," said Chris Rupkey of the Bank of Tokyo-Mitsubishi in New York.

Sales rose 0.3 percent, the Commerce Department said, as consumers bought an array of goods from necessities to luxury items. Analysts had expected sales to slip 0.2 percent. January sales, however, were revised down to a gain of 0.1 percent from the previously reported 0.5 percent rise.

U.S. stocks initially rose on the retail sales data but lost steam, and major indexes ended flat on the surprise drop in consumer confidence. U.S. government debt prices rose as investors focused on the weak sentiment data, while the dollar tumbled to a one-month low against the euro.

The sales report was the latest in a series of data hinting at building underlying strength in an economic recovery that has been largely driven by government stimulus and a swing toward inventory building by businesses.

Officials from the Federal Reserve meet on Tuesday and are expected to hold overnight interest rates in a range of zero to 0.25 percent and maintain a pledge to keep them ultra-low for an "extended period" to foster a more robust recovery.

Stronger data, however, could spark a lively discussion at the meeting, as some officials have raised concerns about the inflationary impact of keeping rates too low for too long.

Treasury Secretary Timothy Geithner said on Friday the economy was gradually strengthening across the board, but cautioned it would take time to fully recover.

The rise in spending came even as consumers were turning more sour. Thomson Reuters/University of Michigan's Surveys of Consumers' index on consumer sentiment slipped to 72 cash advance to savings account.5 from 73.6 in February. That was below market expectations for 73.6.

LABOR MARKET KEY

Economists, however, warned against placing too much weight on the dip in sentiment, saying it was not a good predictor of future sales. Consumer spending has continued to surprise on the upside even with confidence trending lower.

"What is more important is what happens in the job market and that market is improving. February was distorted by storms, but the underlying trend is up and March will be strong," said Bill Cheney, chief economist at John Hancock Financial Services in Boston.

Sluggish consumer spending had fed worries the economy's recovery from the worst downturn in seven decades could falter when support from government stimulus and the swing in the inventory cycle disappears.

Motor vehicle and parts purchases extended their decline last month, falling 2 percent, likely reflecting a drop in demand by consumers nervous about vehicle recalls by Toyota Motor Corp. Excluding motor vehicles, retail sales rose 0.8 percent, building on a 0.5 percent rise the prior month.

Even more encouraging, core retail sales — which correspond most closely with the consumer spending component of the government's gross domestic product report — increased 0.9 percent after rising 0.6 percent in January.

"This implies that personal consumption is on track to exceed 2.0 percent for the first quarter of the year and bodes well for a greater than 3.0 percent print on gross domestic product," said Joseph Brusuelas, chief economist at Brusuelas Analytics in Stamford, Connecticut.

A second report from the Commerce Department showed business inventories were unchanged in January after falling by 0.3 percent in December.

Inventories are a key component of gross domestic product changes over the business cycle and a sharp slowdown in the pace of inventory liquidation handed the economy its fastest growth rate in six years in the fourth quarter.

(Additional reporting by Glenn Somerville in Washington and Caroline Valetkevitch in New York; Editing by Chizu Nomiyama)

Retail sales rise as shoppers fight winter blues

08
Mar

The Female Factor: Awareness Rises, but Women Still Lag in Pay

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PARIS — Companies in the United States, Spain, Canada and Finland lead the world in employing the largest numbers of women from entry level to senior management, according to a report set to be published Monday by the World Economic Forum. Yet the report also found that, despite increasing awareness of gender disparities in the workplace, women at many of the world’s top companies continued to lag behind their male peers in many areas, including pay and opportunities for professional advancement.

Moreover, many of these companies have yet to implement policies to address these gaps, despite pressure from many of their governments to do so.

The forum, based in Switzerland, surveyed 600 heads of human resources offices at the largest employers in 20 countries representing 16 different industries.

The poll assessed companies according to a range of criteria, including rates of female representation, whether the companies measured or set targets for gender balance in pay or promotion, and whether they offered benefits, like paid family leave, to promote work-life balance for their employees.

The findings, which were timed to coincide with the 100th anniversary of International Women’s Day, follow the announcement Friday by the European Union of an initiative aimed at significantly narrowing the union’s average 18 percent gender wage gap, which has changed little in the past 15 years.

A study by the 27-member union last year estimated that closing the wage gap could lead to a potential increase of 15 percent to 45 percent in gross domestic product.

A 2009 report by the International Labor Organization found an average 20 percent difference in pay for men and women employed full time in the Group of 20 largest developed and developing economies. Yet the World Economic Forum’s report found that 72 percent of the companies in its survey had no systems to track salary differences by gender.

In addition, 60 percent of the companies said they had no affirmative action policies to promote women within their hierarchies and did not measure women’s participation in their work forces.

Companies in India had the lowest percentage of female employees, 23 percent, just below Japan, with 24 percent, the forum’s report found.

Turkey, Austria and Italy rounded out the bottom five, with women representing just 26 percent, 29 percent and 30 percent of their staffs, respectively instant payday loans.

As its focus was on companies, the forum’s survey did not assess the status of women working in the public sector or in education, areas where female representation is traditionally high and where policies to promote gender balance are often institutionalized by law.

Women remained in the minority of senior corporate managers, representing just 5 percent of the chief executives of the 600 companies surveyed. Finnish companies in the sample had the largest proportion of female chief executives, with 13 percent, followed closely by Norway and Turkey with 12 percent and Italy and Brazil with 11 percent.

The high percentage of female chief executives at Turkish companies, despite having relatively low levels of female employment, was due to the fact that many of the biggest companies were controlled by families where women were at the helm, said Saadia Zahidi, co-author of the report and head of the forum’s Women Leaders and Gender Parity Program. In Italy, which reported similarly large numbers of women at the top, the companies surveyed were mainly large, multinational corporations.

In both countries, Ms. Zahidi said, “there is a real dearth of women elsewhere in the corporate hierarchy.”

The forum’s findings also follow a global study of 4,500 business school graduates published last month by Catalyst, a U.S.-based organization that advocates for women in the workplace.

The Catalyst study found that, even in this high-potential group, women consistently lagged behind men in advancement and compensation from their very first professional job. The differences held even in comparing men and women of equal levels of work experience and professional aspiration and in discounting for whether or not they had children.

Herminia Ibarra, a professor of leadership and organizational behavior at Insead, an international business school, and a co-author of the forum’s report, said of the findings, “Study after study shows that, in most countries and industries, women enter the workplace pipeline in representative numbers. Then, something fails to happen.”

The Female Factor: Awareness Rises, but Women Still Lag in Pay

26
Feb

Visteon turns in 4Q profit

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VAN BUREN TOWNSHIP, Mich. – Auto parts supplier Visteon Corp. posted a fourth-quarter profit Friday, helped by cost-cutting moves and the hints of a recovery in the global auto industry.

Visteon said it earned $276 million, or $2.12 per share, after a loss of $346 million, or $2.67 per share in the year-ago quarter. The 2008 quarter was affected by a $200 million charge related to its business making interior parts for vehicles.

Sales grew 23 percent to $2.03 billion. The company said sales improved across all major regions where it sells parts, a trend Visteon said was a sign that industry and broader economic conditions are getting better.

Visteon, the top supplier to and a former subsidiary of Ford Motor Co sears kerosene heaters., filed for Chapter 11 bankruptcy protection in May following a sharp downturn in the U.S. market for cars and trucks. However, overall sales began to pick up last in 2009.

Cost-cutting measures from Visteon’s restructuring also helped the quarterly results. That included a $133 million gain from terminating some employee benefit programs.

For all of 2009, Visteon earned $184 million, or 98 cents per share.

Shares of Visteon, which trade on over-the-counter markets, more than doubled in morning trading, rising 7.6 cents to nearly 14.8 cents per share.

Visteon turns in 4Q profit

Hot News: Royal Bank of Scotland loses $5.5 billion in 2009

25
Feb

Asian Shares Falter on Concerns About U.S. Economy

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SINGAPORE — A tepid rally in Asian shares faltered early on Thursday and the dollar rose after the Federal Reserve chairman Ben Bernanke’s reaffirmation of an extended period of low U.S. rates boosted risk-seeking but also raised some concerns about global growth.

The Nikkei 225 average in Japan rose initially, helped by exporters like Canon and as Toyota Motor reversed most of its losses of the past two days after its chief apologized to consumers and pledged reforms to skeptical U.S. lawmakers at Congressional hearings. Toyota’s U.S.-listed shares jumped 3.9 percent.

But a more than 2 percent slide in Denso Corp. weighed on the broader Tokyo market after authorities said the FBI has raided three Detroit-area Japanese auto parts makers for a sealed federal antitrust investigation, including the Toyota suppliers Denso and Tokai Rika.

“The market welcomed a rebound in U.S. stocks after news that the country will continue its low rate policy,” said Yutaka Miura, a senior technical analyst at Mizuho Securities. “But we’ve seen a series of worse-than-expected economic data from America lately and uncertainty about the outlook for the U.S. economy is increasing.”

The MSCI Asia excluding Japan index fell 0.43 percent by midday, and sectors that fell the most were industrials and technology.

The Nikkei closed 0.95 percent lower.

A report on U.S. new home sales on Wednesday highlighted the Fed’s predicament. Sales slumped more than 11 percent to a record low, suggesting the sector at the center of the financial crisis had yet to fully heal.

Mr. Bernanke’s assessment of the economy was also grim, further curbing the speculation of quicker policy tightening that had been spurred by the Fed’s raising of the discount rate last week.

He also said a weak job market and tame inflation warrant low interest rates for “an extended period,” making clear that policy tightening is some time away, which helped the Dow Jones Industrial average rise 0 best humidifiers.89 percent.

The dollar fell initially in Asia but the trade-weighted index soon recovered to 80.96.

Gold was at $1,096 an ounce, far from a the previous day’s high of #1,107.95.

Oil prices also hovered just above the $80 mark but were also off the previous day’s highs at $80.45, a level hit when stock markets rallied on the back of Mr. Bernanke’s remarks despite a bearish report showing a build up in U.S. crude stockpiles.

The euro stayed weak at $1.3483, paring further the gains it had made soon after Mr. Bernanke’s remarks and heading closer to a nine-month low of $1.3442 struck last week.

Worries about a possible downgrade of Greece weighed on the European single currency, pushing it down from above $1.36 on Wednesday.

Standard and Poor’s said it may cut Greece’s BBB+ rating by one or two notches within a month, citing downside risks to growth that could hinder the country’s deficit-cutting plans.

“The Greek situation remains fluid. So acrimonious discussions between Athens and Brussels could easily result in further near term euro slippage,” Citigroup said in a note.

But Citigroup also said that with euro net short positions at a record high, any positive news from Greece in the coming weeks could lead to a bounce in the single currency.

The euro has lost over 10 percent since late November as fiscal woes in Greece intensified in the past few months leading to a huge sell-off by investors.

Reuters

Asian Shares Falter on Concerns About U.S. Economy

Hot News: Targets 4Q profit rises 53.7 percent

22
Feb

Obama version of health reform expected Monday

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WASHINGTON – The White House readied its last-ditch effort to salvage health care legislation Sunday while the Senate’s Republican leader warned Democrats against the go-it-alone approach.

The White House was expected to post a version of President Barack Obama’s plan for overhauling health care on its Web site on Monday, ahead of his critical and daring summit at Blair House on Thursday. The plan, which was likely to be opposed by the GOP, was expected to require most Americans to carry health insurance coverage, with federal subsidies to help many afford the premiums.

Hewing close to a stalled Senate bill, it would bar insurance companies from denying coverage to people with medical problems or charging them more. The expected price tag is around $1 trillion over 10 years.

The conference at the White House guest residence is to be televised live on C-SPAN and perhaps on cable news networks. It represents a gamble by the administration that Obama can save his embattled overhaul through persuasion — a risky and unusual step.

It was forced on the administration by the Senate special election victory of Massachusetts Republican Scott Brown in January. He captured the seat long held by Democrat Edward M. Kennedy, who died last year. Brown’s victory reduced the Democrats’ majority in the Senate to 59 votes, one shy of the number needed to knock down Republican delaying tactics.

Senate Minority Leader Mitch McConnell said Sunday he would participate, but that Obama and congressional Democrats would be wrong to push the bills they wrote in the House and Senate.

“The fundamental point I want to make is the arrogance of all of this. You know, they are saying, `Ignore the wishes of the American people. We know more about this than you do. And we’re going to jam it down your throats no matter what.’ That is why the public is so angry at this Congress and this administration over this issue,” said McConnell, R-Ky.

While the House and Senate had passed its own version of a health overhaul, lawmakers had yet to settle their differences and produce a single bill acceptable to both chambers when Brown won.

California Gov. Arnold Schwarzenegger, a Republican, hoped a compromise — “sweet spot,” he called it — was possible No teletrak payday loan.

“If you really want to serve the people and not just your party, I think you will find that sweet spot and you can get it done,” he said.

Democratic Gov. Ed Rendell of Pennsylvania appealed to Republicans to offer their own proposals. “You take some of our ideas. We’ll take some of your ideas. We may not love your ideas, but we’ll take them. If they don’t do that, I think this whole dynamic of this political year could turn around,” he said.

Rendell and Schwarzenegger spoke from the sidelines of the National Governors Association meeting. Four leaders of the group, two Republicans and two Democrats, later summoned the media to a news conference and offered to strike a compromise between the warring factions in Washington.

“We are making an offer to help and are very willing to roll up our sleeves and help if that’s what Congress and the president decided,” said Tennessee Gov. Phil Bredesen, a Democrat.

The governors’ plea was an implicit acknowledgment that Obama and the Democratic-led Congress have frozen governors out of the process.

The Blair House meeting takes place nearly a year after Obama launched his drive to remake health care — a Democratic agenda item for decades — at an earlier summit he infused with a bipartisan spirit. The president will point out that Republicans have supported individual elements of the Democratic bills.

Under the expected Obama plan, regulators would create a competitive marketplace for small businesses and people buying their own coverage. The plan would be paid for with a mix of Medicare cuts and tax increases. It would also strip out special Medicaid deals for certain states, while moving to close the Medicare prescription coverage gap and making newly available coverage for working families more affordable. The changes would cost about $200 billion over 10 years. It’s unclear what the total price tag for the legislation would be; the Senate bill was originally under $900 billion.

McConnell spoke on “Fox News Sunday.” The governors appeared on ABC’s “This Week.”

Obama version of health reform expected Monday

19
Feb

Fed’s Move Prompts Drop in Asian Stocks, but Dollar Rises

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HONG KONG — Stock markets in the Asia-Pacific region fell on Friday after the U.S. Federal Reserve increased the rate on loans made directly to banks, as the move reminded global investors that the era of cheap money was gradually drawing to a close.

The U.S. currency continued its recent rise against the euro, trading at around $1.35 by mid-morning in Asia, its strongest level against the European single currency in nice months.

Oil and other commodities fell because they are sensitive to higher interest rates, which can tame economic growth. Crude oil prices were down 1 percent at around $78.20 per barrel.

Gold, which tends to sag when the dollar rises and inflation threats recede, eased to $1,107 an ounce.

The Fed’s move, announced after the close of trade in the United States was seen as the first significant step by the Fed to start exiting some of the extraordinary stimulus measures that were announced as the global financial crisis began to escalate in late 2008. It does not affect the benchmark fed funds rate — the rate at which banks lend to each other overnight that determines the cost of borrowing for normal consumers and businesses. That rate remains at a record low.

However, Thursday’s announcement by the Fed prompted investors to focus on an eventual rise in the fed funds rate as confidence in the U.S. economy’s gradual recovery takes hold.

“The move indicates confidence in market stability and economic recovery and will make it easier to raise the Fed funds rate target,” said Dariusz Kowalczyk, chief investment strategist at SJS Markets in Hong Kong in a note no faxing pay day loans.

The Nikkei 225 index in Tokyo eased 0.7 percent by late morning, with the Japanese Finance minister, Naoto Kan, saying the Fed’s move was unlikely to hurt the Japanese economy.

The benchmark Kospi index in Seoul fell 1 percent, and in Hong Kong the Hang Seng index dropped 2.0 percent.

In Singapore, the Straits Times index in Singapore was 0.5 percent lower in morning trade. In a sign that the Asian region is recovering more quickly than the United States and Europe, the Singapore authorities on Friday said they expected the country’s economy to expand by between 4.5 percent and 6.5 percent this year, more than previously forecast. Last year, Singapore’s economy shrank by 2 percent.

The stock market in Australia, whose economy has been powering ahead thanks in large part to voracious appetite for its natural resources from China, slipped 0.3 percent, amid indications that the central bank there will continue to raise interest rates as economic conditions improve.

The markets in mainland China, Taiwan and Vietnam are closed all week for the Lunar New Year holiday.

The Fed’s increase in its so-called discount rate was by a quarter of a percentage point, to 0.75 percent from 0.50 percent, and is effective Friday.

Fed’s Move Prompts Drop in Asian Stocks, but Dollar Rises

Hot News: Case Is Said to Link HSBC to U.S. Tax Evasion Inquiry

08
Feb

CIT names ex-Merrill CEO Thain as chairman, CEO

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NEW YORK – CIT Group has chosen former Merrill Lynch CEO John Thain to lead the company as chairman and CEO as the commercial lender continues to restructure its business following a brief stay in bankruptcy protection last year.

CIT Group Inc., one of the nation’s largest lenders to small and mid-sized businesses, says Thain will take the helm immediately. He replaces acting interim CEO Peter J. Tobin, who will remain on CIT’s board.

Thain served as chairman and CEO of Merrill Lynch until its sale to Bank of America was completed in January 2009 bad credit payday advance. He resigned under pressure from the combined company after reports he rushed out billions in bonuses to Merrill employees in his final days as CEO, while the brokerage was suffering huge losses and just before Bank of America took it over.

CIT names ex-Merrill CEO Thain as chairman, CEO

02
Feb

Geithner says economy improved from year ago

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WASHINGTON – Treasury Secretary Tim Geithner (GYT’-nur) says the nation’s economy is stronger than it was a year ago, yet the government must continue to act to stimulate job growth.

Geithner told the Senate Finance Committee Tuesday that the Obama administration is trying to balance the desire to add jobs with the need to rein in ballooning budget deficits.

President Barack Obama has proposed giving companies a $5,000 tax credit for each new worker they hire in 2010 no credit check payday loan. Businesses that increase wages or hours for their current workers in 2010 would be reimbursed for the extra Social Security payroll taxes they would pay.

Geithner says economy improved from year ago

Hot News: Oil rises above $75 on China, U.S. economy prospects

01
Feb

News Analysis: Is the Day of Tiny Ads Finally Here?

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Every year around this time, a few brave forecasters declare that advertising on mobile devices is poised to become the next big thing in marketing. And every year, the results disappoint.

But this year, with technology powerhouses like Apple and Google introducing whole new mobile devices and buying up ad firms specializing in the small screen, the forecasts may finally be right.

By now, the sales pitch is familiar: The mobile phone offers advertisers all the benefits of traditional Internet ads, including the ability to track their effectiveness. And it lets marketers reach consumers on the go, on a gadget they clutch intimately.

Why, then, according to Juniper Research, did worldwide spending on mobile advertising last year amount to only $1.4 billion — less than one third of one percent of total ad revenue?

For one thing, some marketers remain wary about trying it, for fear of annoying consumers by intruding on their personal space. A technical toolbox poorly equipped to work with small screens has also hurt; after all, banner ads the size of thumbnails don’t make a big impression.

Industry analysts say that now, with the introduction of Apple’s iPad tablet, an entirely new approach to mobile ads could be near.

That is because the iPad, a cross between a laptop and an iPhone, looks more like an iPhone from an ad perspective. It does not support Adobe Flash, the software used for much PC-based advertising. So, to make their ads available to iPad users, marketers may have to develop new kinds of ads, rather than simply adapting existing Web ads no faxing payday loan.

Apple, seeing big potential in mobile advertising, recently agreed to acquire a specialist in that business, Quattro Wireless. That followed a deal by Google to buy one of the largest players in the field, AdMob. The combined $1 billion-plus cost was of a scale not previously seen in the world of advertising on the tiny screen.

“It’s a pretty exciting time for the market,” said Oliver Roxburgh, managing director of the British operations of YOC, a mobile ad agency. “It’s starting to grow up a little.”

Mr. Roxburgh’s enthusiasm has been buoyed by the efforts of Apple and Google and is shared by a growing chorus of industry experts.

Indeed, Windsor Holden, a principal analyst at Juniper Research, predicts that mobile ad spending worldwide will more than quadruple, to $6 billion, by 2014. And he does not shrink from the prediction.

“Everybody has been hoping for about the last five years that the next year would be the one when mobile advertising takes off,” Mr. Holden said. “There are a number of pointers to the possibility that this will be the year when we get some significant traction.”

News Analysis: Is the Day of Tiny Ads Finally Here?

Hot News: Economic Preview: Too soon to say recovery will last

29
Jan

Obama defends economic policies at GOP conclave

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BALTIMORE – President Barack Obama has staunchly defended his economic policies in a visit with House Republicans, although he acknowledged the administration initially underestimated how high national joblessness would go.

Obama was responding Friday at a GOP retreat to an assertion by Rep. Mike Pence that he should have embraced an across-the-board tax cut early in his term. The Republican conference chairman said that Obama had chosen to rely on targeted “boutique” tax cuts rather than across-the-board relief.

Obama defended his strategy but conceded officials mistakenly believed unemployment would go no higher than “the 8 percent range payday loan with savings account.” He also said that many of the jobs were lost in December, January and February of 2009, before he took office or before any of his programs took effect. Obama told the Indiana Republican, “I’m assuming you’re not faulting my policies for that.”

Obama defends economic policies at GOP conclave

25
Jan

Geithner warns of Bernanke fallout

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Treasury Secretary Timothy Geithner warned that the financial markets would view a Senate rejection of Ben Bernanke's renomination as "very troubling" but said he's sure the embattled Federal Reserve chairman will prevail.

"We're very confident that the chairman will be reconfirmed by the Senate, and we think it's very important he be reconfirmed by the Senate," Geithner said Friday in an interview at the Treasury for POLITICO's new video series, "Inside Obama's Washington," debuting Monday.

"He's done a remarkable job of helping steer this economy out of the great recession. And I think he'll play a very important role in helping in the success of our efforts to try to make sure we are bringing this economy back to durable growth."

Asked about possible market reaction to a defeat, Geithner said: "I think the markets would view that as a very troubling thing to the economy as a whole. But, as I said, I don't think they should be uncertain. I think they should be confident because we are very confident he will be reconfirmed."

Bernanke is having such a rough time, Geithner suggested, because the country is "in a moment where people are incredibly angry and frustrated by the damage this crisis caused."

"You see that across the country," Geithner said. "That's perfectly understandable, and everybody involved in this effort is bearing a lot of the brunt of that frustration and anger."

The Bernanke nomination is the latest headache for the nation's 75th Treasury secretary, who has kept his dry sense of humor while juggling some of the Obama administration's highest-stakes crises — winding down financial bailouts and trying to get banks lending again, instilling confidence despite data that are mixed at best and serving as a public face (and sometimes punching bag) for an economic team often accused of being too close to Wall Street.

He sees his biggest challenge as getting the right incentives in place to help spur private-sector job creation through tax, export and research-and-development policies. And he continues to shepherd the financial reregulation that was a centerpiece of President Barack Obama's first-year agenda. The House has passed a version, and the Senate will continue working on it this winter.

Geithner is most grateful that his strategy to bring private capital in to stabilize the markets has worked effectively. Banks have raised about $200 billion in nongovernment equity and debt, effectively taking the government out. Last year, most everyone assumed the U.S. would have to pony up a lot more taxpayer money. In fact, the government has gotten most of the bank money back and is on track to make a profit on that part of the bailout. Treasury’s view is that without that stability in the system, no progress on the broader economy would have been possible.

Geithner, 48, came up as a staff guy, working in three administrations for five Treasury secretaries. And he was president and CEO of the Federal Reserve Bank of New York during the financial meltdown of 2008. So this is the second time that he's been one of a handful of officials charged with staving off a depression.

Despite the sudden pressure from Bernanke's renomination, Geithner chatted calmly in the Treasury's Diplomatic Reception Room. He joked that he'd like to do a segment explaining the economy on ESPN's "SportsCenter" (he can't tell the anchors apart) and was looking forward to a birthday dinner with his wife, Carole, at Rasika, a hip Indian restaurant in Penn Quarter.

The question hanging over the pleasantries: Is there any way that Bernanke could lose?

"I don't believe so," Geithner replied. "We are very confident that this will happen, and he will have the support he needs to continue in this important role."

On Saturday, Obama made what a White House aide called "a few check-in calls to senators and members of leadership to make sure Bernanke was on track, and he was assured he was."

The White House was rushing to shore up Bernanke as the stock market was dropping, after Obama's announcement that he wanted further restrictions on the activities of the biggest banks. Geithner rejected the banks' contention that the proposed rules could mean thinner markets and less money available for lending.

"That's the argument you're always going to hear when you try to change things," he said no fax pay day loan. "But I do not believe that there is a credible risk of that in the reforms we are pursuing."

One of the most surprising — and persistent — critics of the administration's economic team has been Arianna Huffington, founder of The Huffington Post, who has taken a boisterously populist tack that includes a Move Your Money campaign to get depositors to move their money from big banks to neighborhood banks.

Geithner didn't endorse her idea. But he did say that customers of financial institutions "should be very demanding in the kind of service they expect, the kind of products they get, the disclosure banks offer to basic fairness and dealings."

"I'm very supportive of customers of banks, other investors of banks, creditors of banks holding them to very high standards — that's something that's very appropriate," Geithner said. "I'm not concerned about her campaign, and I agree with the basic principle … that we've been through a period where I think people are right to expect more of their financial institutions."

Huffington had an off-the-record dinner with Geithner shortly after Thanksgiving and gave him some advice he clearly has not taken. Dodging a question about their conversation, the secretary said that his approach of "trying to fix [the system] quickly and cleanly" should have appeal for both ends of the political spectrum.

"If you're on the right, you should be relatively pleased with our strategy, because we were able to pull the government out of the financial system much more quickly than people thought," he said. "We have a much, much smaller footprint today than when I came into office. And if you're from the left, you should be able to look at the strategy and say, by solving this today at much lower cost, we have more resources available to do things that many people think are important for the government to do better."

Other key points by Geithner:

— On whether he remains confident a clear recovery will be under way by this spring: "Very confident. The economy is healing. It's growing. It's more broad-based. You see the classic signs of greater confidence among consumers and businesses now. They see stronger orders. So I think we've been successful in breaking the momentum of the worst recession in generations. But this crisis caused a lot of wreckage.There's still a lot of damage out there. Unemployment is still very, very high, and we have a lot of work to do to make sure that we're restoring confidence, getting people back to work, making businesses comfortable to make the kind of decisions that are necessary to grow the economy. … I think most business economists, most businesses, would say now that you'll probably start to see positive job growth sometime in the spring."

— On when people are going to start to feel better about the economy: "The turn really came in the second quarter of last year — really in the spring and early summer. That's when the economy started to bottom. That's when the financial markets started to show the classic signs of confidence and hope. And there's been a steady, gradual improvement since then. … I just want to emphasize that this crisis caused an enormous amount of damage not just to people's lives and to businesses but to their confidence in how this country is being run. And we need to restore that, rebuild that. That's going to take a lot of effort over time."

— On his philosophy for the job: "The most important thing — and the really only source of credibility and confidence — is to be honest with people about the challenges we face, to try to be open about how we think it's best to solve them and then to act."

— On his own job security: "I'm going to do this as long as the president wants me to help contribute to fixing this mess, and I'm very proud of what he's been able to accomplish in this first year under enormously difficult conditions."

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