Tag Archive

LONDON (Reuters) — British inflation will be well below the 2% target in two years if interest rates rise in the first quarter, the Bank of England said on Wednesday, suggesting markets are pricing in rate hikes too early.In its quarterly Inflation Report, BoE projections showed CPI inflation at around 1.4% in two years’ time if rates follow the path implied by market expectations — rising to 0.7% in the first quarter of 2010 and going up thereafter.But assuming interest rates stay at a record low of 0.5% and the BoE reaches its 175 billion pound quantitative easing target, “the risks of inflation being above or below the 2% target at the two year horizon are broadly balanced, albeit that the path of inflation is rising.”The latest forecasts are likely to raise expectations that the Bank will keep interest rates where they are for some time to come or even have to further expand its quantitative easing program to get the economy growing strongly again.While the inflation profile was similar to that published in May, the outlook for growth was “somewhat stronger” given the extra stimulus penciled in.The BoE charts show growth returning at the turn of the year and getting close to a rate of 3% in two years’ time.”The stimulus should lead to a slow recovery in economic activity, but the timing and strength of that recovery remains highly uncertain,” the BoE said.

Source:CNN

NEW YORK (Fortune) — Guaranty Bank is hardly a household name. But the Austin, Texas-based thrift’s looming failure is shaping up as a big headache for bank supervisors — not to mention a black eye for Carl Icahn and others in the smart money set. Guaranty (GFG) could be soon seized by the government in what would be the biggest bank failure in a year that has already had 64 of them. Last week, the bank warned investors to expect a federal takeover after regulators forced a writedown of its risky mortgage investments and a bid to raise new capital failed. Guaranty operates 160 branches in Texas and California, two of the three best banking markets in the nation thanks to their size and population growth. But the bank’s capital problems and its smallish, scattered network of branches could detract from Guaranty’s appeal, making it tough for regulators to find a buyer quickly — or without substantial federal subsidies. “This may not be closed as quickly as you think, since it will require bids and rebids,” said Miami banking consultant Ken Thomas. That means resolving Guaranty’s failure is likely to be costly to the FDIC’s deposit insurance fund, whose balance is at its lowest point in almost two decades. The Federal Deposit Insurance Corp. isn’t the only one taking its lumps. So have some big investors.Shares of the bank’s parent, Guaranty Financial, have dropped 97% since a group led by billionaire Texas hotel mogul Robert Rowling and Icahn, the renowned New York corporate raider, poured 600 million into the company in June 2008. Other big Guaranty holders whose stakes stand to be wiped out include hedge fund managers David Einhorn, who was among the most persistent skeptics of Lehman Brothers before its collapse, and Dan Loeb. “Relatively low franchise value and the fact that two big money investors already got burned on this bank may suggest less interest than with BankUnited,” said Thomas, referring to the Florida thrift that failed in May and was bought by a group of private equity investors.BankUnited had half as many branches and operated in only one state, but had a strong competitive position in the most lucrative counties — something Guaranty lacks. Despite BankUnited’s relative attractiveness, its sale to investors led by vulture investor Wilbur Ross was hardly a walkover for the FDIC. The deal cost the FDIC insurance fund 4.9 billion. A big tab on Guaranty would be costly to the deposit fund, whose balance was 13 billion at the end of the first quarter. The FDIC has estimated failure costs on cases since then at 11.2 billion. A spokesman for the FDIC stresses that it has already set aside an additional 22 billion for failure-related costs in 2009, and adds that congressional action this spring gave the agency access to 500 billion in Treasury credit. Though Guaranty has been around since 1988, it came public less than two years ago. Guaranty was part of the Temple-Inland (TIN) cardboard-box conglomerate until Icahn pressured the company to split up at the end of 2007. Guaranty shares were then distributed to Temple-Inland holders. Guaranty’s chief executive at the time, Ken Dubuque, assured investors that despite the gale force winds sweeping the financial world, the bank would be safe. “We’re keenly aware of the importance of good credit, disciplines and effective risk management, in good times and in difficult times,” he said on the bank’s first earnings conference call in February 2008. But Guaranty’s risk management soon was found wanting. The bank aimed to expand beyond lending to the builders of office buildings, shopping centers and houses to new areas such as small business and corporate energy lending. Because its thrift charter obliges Guaranty to keep 70% of its assets in housing-related investments, the bank matched growth in other areas with expanded investments in housing. That, Dubuque said, is how the bank ended up taking on a giant portfolio of mortgage-backed securities, backed largely by option adjustable-rate mortgages in California and Texas. 0:00
/1:58FDIC wants cushion”We needed to increase the size of the balance sheet, so that was a relatively risk-free way of doing it,” Dubuque told investors in 2008. “We also have liked the returns in that business as well.” But securities backed by option ARMs are anything but risk-free, as investors have learned. Among institutions that dealt most heavily in those were Washington Mutual, the Seattle thrift that collapsed in September with 307 billion in assets, and Wachovia, which was sold to Wells Fargo (WFC, Fortune 500) later in 2008. Other big option ARM users included failed California savings banks Downey Financial and PFF. Losses built at Guaranty over the past year, and Dubuque quit without explanation in November. In April regulators told Guaranty to raise more capital. When that effort failed, they told Guaranty to write down the value of the mortgage-backed securities by more than 1 billion. That move, announced this month, left the bank with negative capital of 748 million, according to filings. Despite its many problems, Guaranty is — for now — operating as usual. “We are open for business. We continue to work with our regulators,” Guaranty said Friday in an emailed statement. “We are focused on providing the best customer service possible and believe we can avoid any disruptions to our customers.”

HONG KONG/NEW YORK (Reuters) — Bank of America Corp. plans to set up a wholly owned subsidiary in China to expand in the world’s fastest-growing major economy, people briefed on the plan said.The largest U.S. bank plans to build up its corporate and investment banking business, and offer wealth management services to tap rich Chinese consumers, according to the sources, who requested anonymity because they were not authorized to discuss the plan.Bank of America (BAC, Fortune 500) has set up a special internal workforce to complete the plans and it will likely formally apply to a Chinese banking regulator for a local incorporation license in the next few months, the people said.A Bank of America spokesman declined to comment.It is unclear how much Bank of America, which acquired investment bank and brokerage Merrill Lynch & Co on Jan. 1, will invest in its China incorporation.HSBC Holdings Plc. (HBC), among the first foreign banks to win Beijing approval to incorporate locally, invested 1.17 billion in its China incorporation as registered capital in early 2007.0:00
/1:39China: The next big wine marketThe U.S. government has injected 45 billion into the Charlotte, North Carolina-based Bank of America, which has struggled with rising credit losses and the Merrill purchase.Earlier this year, a government order that the bank add 33.9 billion of capital prompted the bank to sell one-third of its stake in China Construction Bank.”I’m sure they were not happy to do that,” said Stuart Plesser, equity analyst at Standard & Poor’s in New York.”If you’re in the investment banking business, you want to have connections in China” in part to help diversify, he said. Last year, before Bank of America acquired Merrill, just 7% of the bank’s net revenue came from foreign sources.Bank of America shares rose 2.7% to 13.89 on the New York Stock Exchange late Thursday afternoon.Next stop: ChinaIncorporating in China can allow foreign banks to operate the same range of businesses as domestic counterparts. Chinese regulators may then grant approvals to open new branches or offer new products more quickly.But under Chinese securities rules, Bank of America still needs to find a local partner for a joint venture to handle high-profit investment banking businesses such as underwriting shares and bonds for local companies in domestic markets.Rivals such as Morgan Stanley (MS, Fortune 500) and UBS AG (UBS) have taken such a step in the past few years.Bank of America’s retail expansion in China is restricted by the CCB stake, which prevents it from competing directly with that company’s retail bank.Instead, Bank of America will probably focus on providing wealth management services under the Merrill brand to rich Chinese customers, according to the people briefed on the plan.Foreign banks’ rush to expand into China has waned amid the recession. Lenders such as Belgium’s KBC Groep NV have canceled or delayed plans to incorporate locally.Earlier this week, Bank of America said it planned to shrink its 6,109-branch U.S. network modestly over the next three to five years.

Source:CNN

NEW YORK: Bank of America Corp. is planning to shrink its branch network by about 10%, according to a report published Tuesday.Kenneth Lewis, Bank of America’s chief executive, told investors last week that the company’s 6,100-branch network would be reduced by about 10%, according to the Wall Street Journal. The newspaper, citing people familiar with the matter, said Lewis made the comments at a meeting last Thursday in Charlotte, N.C. Lewis did not say when the closures would occur.The move comes after two decades of expansion and was prompted by a shift in customer habits as online and mobile services take business away from brick-and-mortar banks, according to the report. A Bank of America (BAC, Fortune 500) spokesman was not immediately available for comment. The company’s shares were down 1% in premarket trading.

Source:CNN

NEW YORK: I want to believe that this earnings-fueled stock rally of the past few weeks is for real. But when you look more closely at corporate results, you have to scratch your head and wonder — just like the old lady in the famous Wendy’s commercials from the 1980s — where’s the beef?In this case, “the beef” is sales growth. Companies are reporting decent profits, but many have done so only because they’ve taken a chainsaw to costs. According to figures from Thomson Baseline, the average revenue decline for companies in the S&P 500 during the past quarter was 7.5% from a year ago. Sure, you’ve got some companies that have managed to grow their top and bottom lines. Apple’s (AAPL, Fortune 500) sales and profit were both up sharply. Ditto for Goldman Sachs (GS, Fortune 500).But the bigger trend in second-quarter results was exemplified by companies such as IBM (IBM, Fortune 500), McDonald’s (MCD, Fortune 500) and Starbucks (SBUX, Fortune 500). Their profits increased, but their revenues were down.The rest of the year isn’t looking too pretty, either. Revenues for S&P 500 companies are expected to drop 9.5% from a year ago in the current quarter. For the full year, sales are expected to be down 5%.Now don’t get me wrong, every company should take a close look at their expenses and find areas that they can pare back. Businesses that had bloated cost structures before the recession should be able to easily juice their earnings by trimming fat. And any recovery in profits has to start somewhere. Talkback: Have companies gone too far with layoffs? Are there other areas where they should cut costs? Leave your comments at the bottom of this story. But at some point, investors may tire of the cost-cutting story — even though they currently appear content to cheer positive earnings surprises any way they can get them. “Stocks could continue to rally because of how far down they were earlier this year, but eventually you’re going to need an increase in demand and sales,” said Mark Oelschlager, manager of the Red Oak Technology fund. Such demand may be hard to come by though. That’s because one of the most notable sources of cost cutting this year for Corporate America are payrolls. People.The wave of layoffs has pushed the unemployment rate to 9.5%, a 26-year high. And it’s almost certain that the jobless rate will rise into the double digits before long. That’s going to make it tougher for companies to keep beating profit expectations.People can talk all they want about how unemployment is a lagging indicator, meaning that the economy will resume growing even while people are still losing their jobs. That may be true. But the recovery may very well be muted. As long as consumers, who’ve been busy saving more in the past few months, keep losing their jobs or remain worried about their job security, they are likely to save more and not spend. “It’s a positive that cost cutting has stabilized the situation for many companies. But if you have high unemployment, that could keep consumer spending depressed.” said Subodh Kumar, an independent market strategist with Subodh Kumar & Associates in TorontoThat may just exacerbate the problem that corporations are facing right now. Businesses won’t feel the need to hire more people, invest in new growth opportunities and produce more stuff. So the “recovery” may not feel like much of a recovery. And that’s something that investors need to think about.0:00
/3:02How strong is the bull?”It’s going to take time for demand to normal levels. We need the unemployment rate to stop rising. Eventually it will but it could be awhile before we see the job market snap back,” Oelschlager said.Plus, companies can only slash costs for so long. The goal of any business is to generate sales by providing consumers a product or service that they need or want. If companies keep cutting workers and holding off on investing in themselves, the quality of product or services they sell will eventually suffer.”There is a growing school of thought that after last September, big corporate CEOs and small business owners were caught like deer in the headlights by the dysfunctional credit markets. Perhaps they cut too much,” said Quincy Krosby, a market strategist with Prudential Financial. “When you are in a downturn, it’s difficult to believe you will ever get out of it. But in the past companies that continue to focus on research and development are better prepared for recoveries,” she added.The good news is that most companies have probably cut costs by such a vast degree already that they should be able to easily post very strong increases in profits once sales do rebound. “Businesses are doing what they need to do in order to manage their bottom line. So when revenue growth does pick up, it should flow straight to the bottom line,” Krosby said.But the problem is that it may take a lot longer for sales to pick up than investors might be expecting.”The revenue declines are unprecedented,” Kumar said. “You’re not going to see any revenue growth until 2010, and probably won’t see a return to normal sales growth until 2011.” Talkback: Have companies gone too far with layoffs? Are there other areas where they should cut costs instead?

NEW YORK (Fortune) — Bank of New York Mellon is not a name familiar to retail customers, but its role in the financial system is important enough that it was one of the first nine banks persuaded to accept billions of dollars last October from the Troubled Asset Relief Program — in Bank of New York Mellon’s case, 3 billion. The company is the world’s largest custodial bank, handling more than 20 trillion in assets for other banks and investors. In February, federal regulators stress-tested the nation’s 19 largest banks and found only three institutions will be profitable in 2010 if the economy gets much worse. Bank of New York Mellon (BK, Fortune 500) would lead that pack, ahead of American Express (AXP, Fortune 500) and Goldman Sachs (GS, Fortune 500). In a recent interview with Fortune’s editors, CEO Robert P. Kelly has more praise than criticism for the government’s interventions. Excerpts:Tell us how things are going in banking.Infinitely better than last fall. Until January or February, many observers thought that the entire banking system was insolvent. After the stress tests, [we saw] that the capital hole wasn’t nearly as great as people had feared and that the underlying earnings power of the banks is fairly high. That’s why bank stocks rallied as much as they did this spring.What happened during the stress tests?It was breathtaking. It culminated in joint sessions of the various regulatory bodies on our premises including the FSA [Financial Services Authority] from the U.K. and the Canadian regulators. Our regulators wanted loan-loss forecasts for the rest of this year and next year using two scenarios: what they expect and then an “adverse case,” which was actually, in many ways, worse than the Great Depression. Then they applied haircuts to our revenue estimates and raised expenses to imply capital ratios.Do you think it was a reasonable test?Yes. It was materially more conservative than what we expect. Based on our analysis of the 19 firms, in the adverse case, only three would make money, including us.0:00
/8:33Transparency? Not so much …We were surprised to see you on the TARP list.It was explained in the [Oct. 13] meeting. They felt we are important to the infrastructure of the payments system of the United States and did not want there to be any questions about our financial viability. We had custody of 23 trillion of the world’s securities, and a one-third market share of corporate-trustee activity. We clear over half the securities of the U.S. government. We’re important to the overall infrastructure of the financial markets, not just in the U.S. but also around the world.They very much wanted all the major banks to be part of the program. I understand the U.K. government [had] tried to do essentially the same thing with their banks. Some U.K. banks started to back away from it, and it morphed from an industry shoring up or a “recapitalization” plan to a “rescue” plan. I expect the U.S. did not want that to happen here.What are you concerned about going forward?Well, we still have some weak securities on our balance sheet, which were all triple-A when we bought them but some of which turned out to be triple-C in reality. It’s manageable, though. We’ve been profitable for the last six quarters, and we are very liquid with nearly half of our assets in cash and short-term securities. The banks that disappeared lacked liquidity. They were lending long and borrowing short. Later this year, I expect we’ll get new proposed standards for capital and liquidity.Will the required ratio make you less profitable?I don’t think so. There are two key capital ratios: Tier 1 Capital and Tier 1 Common. We have roughly twice the minimum of Tier 1 and Tier 1 Common.Is Tier 1 Common a new standard?It’s basically common equity divided by risk-weighted assets, which better indicates one’s ability to absorb losses. The problem with TARP is that it is preferred equity. It can’t absorb losses, because it’s debt with a coupon. However, I think it had huge benefits, for a short period of time. We were in a liquidity crisis not seen in almost 100 years in the United States. And so to come out and say, “Here are our biggest financial institutions and we are telling you, United States and the rest of the world, these guys aren’t going down,” that’s very powerful. Particularly outside of the U.S., people said, “Finally, we know who the survivors are.” We quickly picked up a lot of deposits and new business. I think people will look back on this five or ten years from now and say that TARP did its job. It helped avert a global calamity.Have you paid back your TARP money?Yes. We raised 1.5 billion in uninsured debt, at a much lower rate than TARP and common equity of 1.4 billion, proving that we could access the capital markets. We reduced our dividend, which provided us with another 750 million per year. The sum of those three things is more valuable than having 3 billion of preferred [equity]. Our balance sheet is stronger today than at the time of receiving TARP.You were pretty impressed with how Washington handled the crisis in the fall. Have you continued to be impressed?Yes. I was negative initially on the stress test, because going public with it created downward pressure on the stock prices for several months. But in the end, the numbers spoke for themselves and the markets responded.It seems like one reason why the Public-Private Investment Partnership isn’t going forward is because the gulf is too wide between what investors want to pay and what the banks want to sell for.There’s zero liquidity in many of these instruments. If, for example, you own a 100 [mortgage-backed] security and think you’re going to get 95 back, it probably trades at 40. The bid-offer spread is huge between what people would be willing to buy and sell at.But both sides agree on the actual value?There are accepted ways of determining the expected cash flows on individual securities, which depend upon the default rate and the severity, with generally available data.You said in your annual report that you’ve written down 1.6 billion of securities, but you actually thought the loss would be 535 million. Is that still what you think?Roughly. In the first quarter, we cumulatively had 7.5 billion pre-tax write-downs on marked-to-market securities, which was charged through our capital account. That’s why so many financial institutions were capital-short. The accounting has changed. Under the new rules, if a dollar is going to return 99 cents, you only take one cent through the income statement. You still do the other things to the capital account.I’m a former trader, so I love mark-to-market accounting for traded instruments. But in the banking business, you’re holding loans and securities to maturity. You should disclose what the mark-to-market is, so investors are aware, but not through the capital account.How [else] should the rules be changed?We are in a global economy. We need global accounting standards. FASB [Financial Accounting Standards Board] should be merged with the International Accounting Standards Board. We need to change the policies that have been major problems in this recession. In good times, we need to be able to build credit reserves. When things are good, the FDIC should be building up premiums too. Finally, we need to consolidate the number of regulators overseeing our industry. There’s a lack of accountability, and it is out of line with the rest of the world.

Source:CNN

ATLANTA (CNN) — A recall of beef by a Colorado company that was announced last week because of possible E. coli contamination was expanded Sunday to include an additional 380,000 pounds of the company’s beef products, according to the U.S. Department of Agriculture.The initial recall of 41,280 pounds announced last Wednesday was voluntarily expanded by the JBS Swift Beef Company, of Greeley, Colo., as a result of “an ongoing investigation into 24 illnesses in multiple states, of which at least 18 appear to be associated,” the USDA’s Food Safety and Inspection Service said in a statement.It did not say which states had reported illnesses, or specifically where the beef products had been sold.The beef products were produced on April 21 and were distributed nationally and internationally, the USDA said. Boxes of the recalled product bear the establishment number “EST. 969″ inside the USDA mark of inspection, the identifying package date of “042109″ and a time stamp ranging from “0618″ to “1130,” the statement said. It added that some of the beef products might have undergone further processing and might not have the “EST. 969″ marking on products for sale directly to consumers.The USDA urged customers with concerns to contact their point of purchase of the beef products.”The recalled products include intact cuts of beef, such as primals, sub-primals, or boxed beef typically used for steaks and roasts rather than ground beef. (The Food Safety and Inspection Service) is aware that some of these products may have been further processed into ground products by other companies. The highest risk products for consumers are raw ground product, trim or other non-intact product made from the products subject to the recall,” the statement said.Phone calls to the company were not answered Sunday. But on the JBS Swift Beef Company Web site, company spokesman Chandler Keys said, “We continue to work closely with the USDA to ensure that product is removed from the marketplace and the recall is completed successfully.”"It is important for consumers to note that the recalled product from the date in question was sold by JBS as whole muscle cuts, not as ground beef,” Keys added. “The ground beef that might have been associated with illness was produced by other companies who often do not use the antimicrobial intervention steps we employ in our facility to reduce the risk of the beef products. Nevertheless, we have agreed to expand our recall of whole muscle cuts out of an abundance of caution for consumers.”Symptoms of infection with the E. coli bacteria can include severe diarrhea, bloody diarrhea, vomiting and severe abdominal cramping.The USDA urged consumers to cook all ground beef or ground beef patties to a internal temperature of 160 degrees Fahrenheit to kill any bacteria.

Source:CNN

NEW YORK (Reuters) — Bank of America Corp. was sued on Thursday in a federal lawsuit in New York, accusing the largest U.S. bank of discriminating against female brokers at the former Merrill Lynch & Co. by offering them lower retention bonuses than their male counterparts.The lawsuit seeks class-action status, and contends that women brokers were typically eligible for lower bonuses because of gender bias at Merrill, including the brokerage’s practice of steering wealthier clients to male brokers.Because bonuses were based on “production,” or fees earned on client assets, the payout practice authorized by Bank of America “disproportionately disadvantages women and advantages white men as favored employees,” the complaint said.The case was brought in Manhattan federal court by Jaime Goodman, who said she worked as a Merrill broker for 16 years prior to the Jan. 1, 2009 merger.According to the complaint, Goodman was a top-quintile performer at Merrill, having been “a 1 million producer for nearly a decade,” but would have fared even better and gotten a higher retention bonus absent discrimination.Bank of America (BAC, Fortune 500) did not immediately return requests for comment.The plaintiff is seeking compensatory damages including the value of all compensation and benefits lost because of the alleged bias, as well as punitive damages and other remedies.

Source:CNN

NEW YORK (Fortune) — Don’t expect TARP-free banks to unleash a torrent of loans to cash-strapped consumers. The Treasury Department told ten big bank holding companies Tuesday that they are healthy enough to repay their federal loans. In turn, the big banks said they would repay 68 billion to Treasury’s Troubled Asset Relief Program. JPMorgan Chase (JPM, Fortune 500) will be sending Treasury the biggest check, for 25 billion. Treasury Secretary Tim Geithner told Congress that the planned repayments show the “very tangible benefits” of rescue plans such as TARP. Boosting bank lending is “the ultimate measure of the success” of Treasury’s financial rescue programs, Geithner told the Senate Appropriations Committee Tuesday. Still, by that measure, Treasury’s efforts have a ways to go. While bank executives will surely enjoy being out from under the thumb of Congress, it’s unlikely that freeing these banks from the strictures of TARP will bring as much of a surge in lending to consumers and small businesses as Geithner would like. Two of the firms approved to repay loans — Goldman Sachs (GS, Fortune 500) and Morgan Stanley (MS, Fortune 500) are primarily investment banks. State Street (STT, Fortune 500), Bank of New York Mellon (BK, Fortune 500) and Northern Trust (NTRS, Fortune 500) are asset managers that do little lending of any sort. 0:00
/2:16Rushing to repay TARP funds”You look at this list and you’re not really talking about the big-time lenders, with the exception of JPMorgan Chase,” said Anthony Sabino, a professor of law and business at St. John’s University in Jamaica, N.Y. Treasury’s most recent monthly lending reports confirm this. In March, the five investment firms approved to pay back TARP funds Tuesday, showed average outstanding consumer loan balances of just 38 billion, down from 39 billion in February. That compares with 46 billion in outstanding consumer loans at BB&T (BBT, Fortune 500), the Winston-Salem, N.C., lender that is the smallest of the five commercial banks cleared Tuesday for TARP repayment. In addition to JPMorgan Chase and BB&T, the other banks cleared to repay their TARP funds Tuesday were U.S. Bancorp (USB, Fortune 500) and credit card lenders American Express (AXP, Fortune 500) and Capital One (COF, Fortune 500).The TARP repayment plans come as officials renew their efforts to bolster lending both at banks and in the credit markets. Accomplishing both will continue to be a challenge.Three of the biggest lenders to consumers — Bank of America (BAC, Fortune 500), Wells Fargo (WFC, Fortune 500) and Citi (C, Fortune 500) — still have their TARP funds, and none appears likely to repay their obligations any time soon. Meanwhile, the asset-backed securities market has fallen off a cliff since the credit markets froze in August 2007. Issuance of U.S. asset-backed securities dropped 32% in 2007 before plunging 73% in 2008, according to data from the Securities Industry Financial Markets Association. And the decline hasn’t stopped yet. ABS issuance was down 71% from a year ago in the first quarter of 2009, according to SIFMA. That freeze, along with tightening lending standards at banks scarred by poor underwriting, has made it much harder for many borrowers to get credit. But Geithner said in testimony Tuesday he holds out hope that plans like the Federal Reserve’s Term Asset-Backed Securities Loan Facility, or TALF, will succeed in restoring some credit flows via the markets. TALF provides financing for holders of highly rated student, credit card and commercial real estate loans. “We have begun to boost new consumer and business lending by re-starting the markets for asset-backed securities that financed almost half of all lending in this country before the crisis,” Geithner said. “There were more securities of this type issued the four months after we launched our effort than in the preceding nine.”

Source:CNN

Pace of US job cuts slows in May
US employers cut 345,000 jobs in May, the Labor Department said, far less than expected and the lowest monthly job loss since September. The US jobless rate rose to 9.4% in May, the highest since 1983, up from 8.9% in April. This data provides further support to those who believe that the US economy is over the worst. Economists had forecast a loss of 520,000 jobs in May, down from 539,000 jobs lost in April.
Source:BBC