- Jobless Rate Holds at 9.7% in Face of Snowstorms. The U.S. unemployment rate held at 9.7 percent and payrolls fell less than forecast, indicating the labor market strengthened even as East Coast snowstorms forced some employers to temporarily close. Payrolls dropped by 36,000 last month after a revised 26,000 decrease in January, a Labor Department report showed today in Washington. “A lot of people are not seeing the kind of job gains or income gains that they are looking for,” said Wells Fargo’s Silvia. “There is going to be a lot of dissatisfaction with politicians and that is giving rise to this political angst.” Economists surveyed by Bloomberg last month projected the jobless rate will average 9.8 percent in 2010 and end the year at 9.5 percent. The underemployment rate -- which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking -- rose to 16.8 percent from 16.5 percent. The number of part-time workers for economic reasons climbed to 8.8 million in February from 8.3 million the previous month. The federal government added 7,000 jobs. The increase at the federal level reflected in part the hiring of 15,000 temporary workers to conduct the 2010 census. The Census Bureau said it will hire 1.15 million temporary workers in the first half of the year to conduct the population count that takes place every 10 years. The program may have the biggest impact on payroll figures in April through June, when the bulk of the hiring will take place, and will then subtract from the job count the following months after the work is done.
- U.S. Corporate Credit Risk Index Falls to Lowest in Six Weeks. The cost to protect against defaults on U.S. corporate bonds declined to the lowest in more than six weeks after payrolls fell less than forecast. Credit-default swaps on the Markit CDX North America Investment-Grade Index Series 13, which is linked to 125 companies and used to speculate on creditworthiness or to hedge against losses, fell 2.5 basis points to a mid-price of 86.25 basis points as of 11:08 a.m. in New York, according to broker Phoenix Partners Group.
- Banks to Defend Sovereign Default Swaps at EU Meeting. The banking industry is arguing at a meeting with European Union regulators that trading in sovereign credit-default swaps isn’t large enough to affect Greek bond prices. European leaders have said the products fuel speculation that can distort market perceptions, making it harder for countries to borrow. The commission should ban naked swaps speculation, where investors insure bonds they don’t own, because “it is a demonstrably dangerous market,” Richard Portes, founder of the Centre for Economic Policy Research, said in a telephone interview today. “If I were the commission, I’d ask the banks to say what social function the trade in naked CDS has.”
- Fannie, Freddie Ask Banks to Eat Sourced Mortgages. Fannie Mae and Freddie Mac may force lenders including Bank of America(BAC), JPMorgan Chase & Co., Wells Fargo & Co.(WFC) and Citigroup Inc.(C) to buy back $21 billion of home loans this year as part of a crackdown on faulty mortgages. That’s the estimate of Oppenheimer & Co. analyst Chris Kotowski, who says U.S. banks could suffer losses of $7 billion this year when those loans are returned and get marked down to their true value. Fannie Mae and Freddie Mac, both controlled by the U.S. government, stuck the four biggest U.S. banks with losses of about $5 billion on buybacks in 2009, according to company filings made in the past two weeks. The surge shows lenders are still paying the price for lax standards three years after mortgage markets collapsed under record defaults. Fannie Mae and Freddie Mac are looking for more faulty loans to return after suffering $202 billion of losses since 2007, and banks may have to go along, since the two U.S.- owned firms now buy at least 70 percent of new mortgages. “If you want to originate mortgages and keep that pipeline running, you have to deal with the push-backs,” said Paul Miller, an analyst at FBR Capital Markets in Arlington, Virginia, and former examiner for the Federal Reserve. “It doesn’t matter how much you hate Fannie and Freddie.”
- Euro May Sink If EU's Greek 'Bluff' Called, BNP Says. The euro may fall “massively” should investors test the European Union’s strategy to support Greece, either by driving down the nation’s debt or demanding similar help for Portugal and Spain, BNP Paribas SA said. “Europe is playing a type of poker game with a potentially big bluff,” analysts led by Hans-Guenter Redeker, the London- based global head of foreign-exchange strategy at BNP, wrote today. “The real problem would arise in the case of spreads rewidening, activating Europe’s ‘Plan B’ to provide financial aid to Greece. In this case the plan to ring fence Greece would collapse, sending the euro massively lower.”
- Detroit Warns of Bankruptcy Risk as City Prepares Bond Sale. Detroit, the largest U.S. city whose debt is rated below investment grade, warned investors of the risk of bankruptcy as it prepares to sell $250 million of bonds to help close its budget deficit. The city told bondholders in a March 2 preliminary offering statement that while it hasn’t taken steps to reorganize under Chapter 9, it may have few other options if its financial condition gets worse. Detroit officials also detailed the steps they would have to take should bankruptcy became necessary.
- Greek Protests Mount as Parliament Passes Budget Cuts. Striking Greek workers shut down transport and tried to storm parliament as lawmakers passed 4.8 billion euros ($6.5 billion) in budget cuts, including wage reductions, needed to trim the region’s biggest budget deficit. Police with riot shields fired tear gas as demonstrators wearing biker helmets and ski masks pelted them with stones outside parliament in Athens where lawmakers approved the measures.
- Corporate Bonds Rally on Greek Sale, US Jobs.
- Study Sees FHA Taking More Risk. The federal government's mortgage-insurance agency is understating how much risk it has taken on, says a group of economists from the New York Federal Reserve and New York University, increasing the likelihood the agency may need taxpayer funds. The economists warn that the Federal Housing Administration—which has jumped to fill the void left by the collapse of the private mortgage market—is overlooking factors that signal higher losses, according to a working paper released Thursday. The agency has traditionally turned a profit for the U.S. government. But the economists warn that by underestimating the risks it faces, the FHA has increased the likelihood that it will have to ask Congress for money for the first time in its 75-year history. The study doesn't say how likely that now is, but "it's hard to imagine that they won't be returning to Congress several times," said Andrew Caplin, one of the authors and an economics professor at NYU. "It's just inconceivable that the loans ... will not cause very large losses."
- Democrats Revolt Over Energy. President Barack Obama's energy strategy came under attack on at least three fronts Thursday, highlighting the conflict that has hobbled one of the administration's top domestic priorities. On Thursday, big utility operators and some state officials blasted the administration's formal announcement that it would drop plans for a federal nuclear-waste vault beneath Yucca Mountain, Nev., and instead consider what it believes are better options. On Capitol Hill, a group of Democratic lawmakers introduced legislation to block the administration from using the Clean Air Act to regulate carbon-dioxide emissions. Meanwhile, Democratic lawmakers urged the administration not to use federal stimulus dollars to help finance a wind-energy project that involves a Chinese maker of wind turbines. The actions add up to a significant challenge to Mr. Obama, who took office promising a fresh approach to energy policy that would promote jobs, slash greenhouse-gas emissions and put the U.S. in the forefront of new energy-technology development. More than a year into his presidency, Mr. Obama's policies are encountering resistance from big industries and members of his own party. The Energy Department's move to formally drop its application for the Yucca Mountain waste site could hobble efforts to build more nuclear power plants—a strategy the Obama administration has promoted as a way to reduce U.S. greenhouse-gas emissions. Without a permanent solution to the waste-storage problem, several states, including California, won't let new nuclear plants be built. Critics accuse the administration of pandering to Mr. Reid. They also note that three months before Mr. Obama's election, Dr. Chu joined nine other scientists in co-signing a paper advocating Yucca's use. Asked in a recent interview why he now favors terminating the repository, Dr. Chu laughed and said, "I have to work with the reality that I found myself in," then added that "going forward, there are better solutions" than Yucca. Speaking to reporters Thursday on Capitol Hill, he said the administration is confident it has the legal authority to terminate it. Also Thursday, the White House strategy to use the Environmental Protection Agency to regulate emissions of greenhouse gases came under attack from Democratic lawmakers from coal states. The lawmakers introduced legislation to suspend for two years the EPA's authority to regulate greenhouse-gas emissions from power plants and other sources. Although its prospects are murky, the bill underscored the difficulty Mr. Obama faces in persuading lawmakers to go along with his effort to put a price on carbon. Sen. Jay Rockefeller (D., W.Va.) and Rep. Nick Rahall (D., W.Va.) offered the legislation as the EPA plans to finalize regulations governing automobile emissions this month. The agency has come under pressure over plans to eventually regulate greenhouse-gas emissions from large industrial facilities, such as power plants. "I am dead-set against the EPA's plowing ahead on its own with new regulations to limit greenhouse-gas emissions from coal-fired power plants," Mr. Rahall said. The EPA has told senators who hold key votes that it wants to keep coal a part of the fuel mix. But mistrust has been building among lawmakers from coal states in the Appalachian region, where the EPA has held up dozens of mountaintop-removal mining permits, citing the need to protect water quality.
- Wells Fargo(WFC) Plans to Add 10,000 Brokers Over Time.
- GM Is Expected to Reinstate Dealers.
The Business Insider:
- Obama Looking to Give New Life to Immigration. Despite steep odds, the White House has discussed prospects for reviving a major overhaul of the nation's immigration laws, a commitment that President Obama has postponed once already. Obama took up the issue privately with his staff Monday in a bid to advance a bill through Congress before lawmakers become too distracted by approaching midterm elections. In the session, Obama and members of his Domestic Policy Council outlined ways to resuscitate the effort in a White House meeting with two senators -- Democrat Charles E. Schumer of New York and Republican Lindsey Graham of South Carolina -- who have spent months trying to craft a bill. According to a person familiar with the meeting, the White House may ask Schumer and Graham to at least produce a blueprint that could be turned into legislative language. The basis of a bill would include a path toward citizenship for the 10.8 million people living in the U.S. illegally. Participants in the White House gathering also pointed to an immigration rally set for March 21 in Washington as a way to spotlight the issue and build needed momentum. Immigration is a delicate issue for the White House. After promising to revamp in his first year of office what many see as a fractured system, Obama risks angering a growing, politically potent Latino constituency if he defers the goal until 2011.
- 9/11 Trial: White House Urged to Move. Key presidential advisors are pushing to move the trial of the accused mastermind of the Sept. 11 attacks to a military commission, abandoning plans to try Khalid Sheik Mohammed and others in federal courts, according to current and former officials.The recommendation has deeply distressed human rights groups who believe that, if endorsed by President Obama, the change will mean a nearly wholesale return to the detention policies of the Bush administration. The administration's plans to hold a trial in New York City met widespread, bipartisan resistance, and other venues have proven difficult to find. "It is politically untenable," said one official. "No place wants to hold a trial." Officials emphasized that the formal recommendation has not been made to the president, and Obama has made no decisions.
- Who's Behind the Financial Crisis? The New York Times is quoting a spokesman for George Soros as saying that the well-known hedge fund operator is guilty of no wrong-doing in connection with the financial upheaval currently affecting Greece and Europe as a whole. But Zubi Diamond, author of the powerful new book, Wizard of Wall Street, says the agenda of Soros and other short sellers is clear. Their purpose, he says, is "to loot America and any foreign country which invested in America. Greece was one of them. Iceland was ravaged and annihilated." Diamond, with 14 years of experience in the financial markets, calls his book a course in "Economic crisis 101" because of the need to inform ordinary Americans of what is happening right before their eyes. The book is easy to read, although it deals with complex financial regulations and operations, and is only 118 pages. The theme is that the economic crisis was deliberately engineered for profit and political gain and has already resulted in the "looting" of $11 trillion from the U.S. economy.
- 55% Say Congress Should Start Over on Health Care. Most U.S. voters (55%) would rather see Congress scrap the original plan and start all over again, according to the latest Rasmussen Reports national telephone survey. Thirty-seven percent (37%) now think it would be better to build on the health care plan that has been working its way through the House and Senate as a starting point. Democrats, by a 66% to 25% margin, support building on the current plan making its way through Congress. Republicans overwhelmingly take the opposite view, with 85% who say it would be better the scrap the current plan and start over. Unaffiliated voters, by a nearly two-to-one margin, also favor starting over.
- Nevada Senate: Two GOP Hopefuls Take Longer Lead on Reid. Two of Senate Majority Leader Harry Reid’s Republican challengers have again crossed the 50% threshold and now hold double-digit leads in Nevada’s U.S. Senate race. One big hurdle for the incumbent is that most Nevada voters are strongly opposed to the health care legislation championed by Reid and President Barack Obama. The latest Rasmussen Reports telephone survey of likely voters in the state finds Sue Lowden, ex-chairman of the Nevada Republican Party, with a 51% to 38% lead on Reid. Businessman Danny Tarkanian posts a similar 50% to 37% lead over the embattled Democratic leader.
- Ten People Who Could Decide Health Care Reform. At this point, a yearlong health reform effort will live or die in Congress by a few votes that go one way or the other, all in the next few weeks. President Barack Obama knows this as well as anyone, which is why on Thursday he invited a mix of House Democrats — some of the most liberal, and some of the most conservative — to the White House, where he told them to do whatever they can to rally support among their fellow members. And since it appears that the president won’t attract a single Republican vote, wavering Democrats should brace themselves for plenty of attention — from the voters, their leaders and Obama himself, who, a spokesman said, wants a House vote by March 18. Here is a list of the people who will help determine whether Democrats can get a health reform bill through, and the issues that are causing them heartburn:
- State Polls Show Gathering Storm. Congress, it turns out, isn’t the only institution held in low esteem by voters this year. According to a POLITICO review of publicly available polling data, numerous state legislatures are also bottoming out, showing off-the-charts disapproval ratings accompanied by stunning levels of voter cynicism. It all adds up to a toxic election-year brew for legislators inside and outside Washington.
- Federal Pay Ahead of Private Industry. Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds. Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector. Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available. These salary figures do not include the value of health, pension and other benefits, which averaged $40,785 per federal employee in 2008 vs. $9,882 per private worker, according to the Bureau of Economic Analysis. Federal pay has become a hot political issue in recent months because of concerns over the federal budget deficit and recession-battered wages in the private sector. Sen. Scott Brown, R-Mass., made federal pay an issue in his successful campaign to fill Edward Kennedy's seat and is fighting for a pay freeze. The federal government spends about $125 billion annually on compensation for about 2 million civilian employees. "The data flip the conventional wisdom on its head," says Cato Institute budget analyst Chris Edwards, a critic of federal pay policy. "Federal workers make substantially more than private workers, not less, in addition to having a large advantage in benefits."
- Beijing Says Working With Google(GOOG) to Resolve Dispute. China is in consultations with technology giant Google to resolve its dispute with the company, which has threatened to abandon the Chinese market over hacking and censorship concerns, said a Chinese official on Friday. The comment came from Li Yizhong, minister of China's Ministry of Industry and Information Technology (MIIT), speaking on the sidelines of China's annual parliament.
- China Thermal Power Plants May See Huge Loss This Year. Chinese thermal power plants may face huge losses this year similar to that in 2008 if regulators do not raise electricity prices, a senior industry executive said on Friday.
- EU Tempers Hopes of Binding Climate Deal This Year. The European Union executive is tempering its hopes of securing a legally binding climate deal in talks this year culminating in Cancun, Mexico, focusing instead on a 2011 summit in South Africa, a source said. "The realistic approach is to aim for deliverables in the Bonn and Cancun meetings this year, and then to aim for a legally binding agreement in South Africa," the European Commission source said on condition of anonymity. "But we should not give up hope of it being done earlier," the source added. Europe's international standing in climate talks is being harmed by its failure to fulfill aid pledges, a leaked EU document warns. "There is a risk of conflict with new financial commitments the EU has taken in the framework of the Copenhagen accord," warns the paper, seen by Reuters on Friday. The EU has pledged to channel 7.3 billion euros ($9.92 billion) in "climate aid" to poor countries over three years to help them cut emissions from industry and tackle climate impacts on crops. But the accord failed to agree concrete mechanisms for delivering the aid and poor countries worry it will never emerge.
- 2010 Chip Revs to Top Pre-Recession Levels-iSuppli.
- Ankara Blames Obama Over Massacre Vote. Turkey on Friday warned of serious damage to its relations with the US and blamed Barack Obama’s administration for failing to stop a congressional panel approving a resolution that describes the Ottoman-era massacres of Armenians as genocide. The committee vote is a severe test of bilateral ties when Washington is already struggling to persuade Ankara, a Nato member and key regional ally, to back sanctions against Iran.The Turkish government, which denies the genocide, recalled its ambassador to Washington for consultations after the foreign affairs committee approved the resolution by 23 votes to 22, and complained that a last-minute plea by Hillary Clinton, secretary of state, to stop the measure was not forceful enough. “We expect a more effective policy from the administration,” said Ahmet Davutoglu, foreign minister, adding that Washington had displayed “a lack of strategic vision”. He said it was too early to talk of any retaliation. But US officials expressed fears that the panel vote had hurt chances of winning an already sceptical Turkey’s support for Iranian sanctions in the United Nations Security Council, where it has a non-permanent seat. “Getting Ankara on board for punitive actions against Tehran was already going to be a challenge, but an Armenian genocide resolution would make it nearly impossible,” said Stephen A. Cook, a fellow at the Council on Foreign Relations.
- China Statistics Chief Admits Errors in Property Data Calculation. China's statistics chief Friday admitted the method and system of calculating property prices had problems and he promised new measures to correct them. The pledge came from Ma Jiantang, director of the National Bureau of Statistics (NBS), in a seminar attended by government officials, experts on property market and real estate developers. The NBS 2009 National Economic and Social Development Statistics Bulletin, issued on Feb. 25, said housing prices in China's 70 major cities rose 1.5 percent in 2009 from 2008 figures. Since the release, the figure, less than a quarter of the average rise in the previous four years, and the lowest level for nine years, has been widely questioned by the media and public. "Problems do exist in the calculation method of housing prices," Ma said, while denying allegations that the data were cooked up to please the government and real estate developers. "We will seriously reflect upon the public criticisms and take effective measures to improve our work," he said, but "there was no selfish motivation in the calculation."Due to staff shortages, housing price data mainly stemmed from reports by real estate developers, said Ma, who cited Beijing as an example where only one or two officials were responsible for collecting data from hundreds of real estate companies."Under the circumstance, we have to rely on the employees of property companies after giving them short-term training," Ma said. "And some of the employees lack professionalism and a sense of responsibility."