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Showing posts with label USA. Show all posts
Showing posts with label USA. Show all posts
Tuesday, 4 August 2009
The Recession 2009 forum
I would like to set up a recession2009 forum - where we can all exchange thoughts and ideas.
Chat on twitter -
or email me at
hope to chat to you all soon.
Chat on twitter -
or email me at
hope to chat to you all soon.
Monday, 3 August 2009
Unemployment hits 9.5 percent in U.S.
Employers cut more jobs in the U.S. in June causing unemployment to rise to 9.5 percent from 9.4 percent in May, the highest since August 1983.
The Labor Department report shows that in June employers slashed 467,000 jobs and hourly earnings were flat. In May the economy lost 322,000 jobs.
Factory payrolls fell by 136,000 after decreasing 156,000 the prior month. Payrolls at builders fell 79,000 after decreasing 48,000.
read full article at Buffalo Business First
The Labor Department report shows that in June employers slashed 467,000 jobs and hourly earnings were flat. In May the economy lost 322,000 jobs.
Factory payrolls fell by 136,000 after decreasing 156,000 the prior month. Payrolls at builders fell 79,000 after decreasing 48,000.
read full article at Buffalo Business First
Sunday, 19 July 2009
Ten US banks fail recession test
May 8 2009
US banks would need a total of £50 billion in additional funds to survive if the recession deepens, the results of government "stress tests" showed.
An assessment of the robustness of the sector found that 10 of the 19 largest banks would need to find extra capital to see them through the bad times.
Bank of America faces the largest potential shortfall of £23 billion.
It joined a list of institutions that also includes Citigroup and Wells Fargo.
The stress tests were designed to gauge whether America's 19 largest banks have enough capital to see them through a deepening of the recession.
After Bank of America, Wells Fargo was found to have the second largest shortfall of £9.1 billion, followed by GMAC with a potential £7.6 billion black hole.
US banks would need a total of £50 billion in additional funds to survive if the recession deepens, the results of government "stress tests" showed.
An assessment of the robustness of the sector found that 10 of the 19 largest banks would need to find extra capital to see them through the bad times.
Bank of America faces the largest potential shortfall of £23 billion.
It joined a list of institutions that also includes Citigroup and Wells Fargo.
The stress tests were designed to gauge whether America's 19 largest banks have enough capital to see them through a deepening of the recession.
After Bank of America, Wells Fargo was found to have the second largest shortfall of £9.1 billion, followed by GMAC with a potential £7.6 billion black hole.
Ten US banks fail recession test
May 8 2009
US banks would need a total of £50 billion in additional funds to survive if the recession deepens, the results of government "stress tests" showed.
An assessment of the robustness of the sector found that 10 of the 19 largest banks would need to find extra capital to see them through the bad times.
Bank of America faces the largest potential shortfall of £23 billion.
It joined a list of institutions that also includes Citigroup and Wells Fargo.
The stress tests were designed to gauge whether America's 19 largest banks have enough capital to see them through a deepening of the recession.
After Bank of America, Wells Fargo was found to have the second largest shortfall of £9.1 billion, followed by GMAC with a potential £7.6 billion black hole.
Citigroup is being asked to raise an additional £3.3 billion to make it secure. Goldman Sachs, JP Morgan Chase and American Express were among the nine banks deemed not to need to raise additional funds.
The stress tests were designed to help regulators assess the ongoing financial stability of US banks.
They look at two models of the economy going forward - one in which unemployment reaches 8.8% next year and house prices drop a further 14%. In the second scenario, joblessness rises to 10.3% and property slips another 22%.
Banks facing a shortfall under the model will have to come up with a plan to raise additional capital by mid June.
If they cannot do so independently, they may have to turn to the government's £466 billion financial bailout fund.
sourced from Runcorn and Widnes Weekly News
US banks would need a total of £50 billion in additional funds to survive if the recession deepens, the results of government "stress tests" showed.
An assessment of the robustness of the sector found that 10 of the 19 largest banks would need to find extra capital to see them through the bad times.
Bank of America faces the largest potential shortfall of £23 billion.
It joined a list of institutions that also includes Citigroup and Wells Fargo.
The stress tests were designed to gauge whether America's 19 largest banks have enough capital to see them through a deepening of the recession.
After Bank of America, Wells Fargo was found to have the second largest shortfall of £9.1 billion, followed by GMAC with a potential £7.6 billion black hole.
Citigroup is being asked to raise an additional £3.3 billion to make it secure. Goldman Sachs, JP Morgan Chase and American Express were among the nine banks deemed not to need to raise additional funds.
The stress tests were designed to help regulators assess the ongoing financial stability of US banks.
They look at two models of the economy going forward - one in which unemployment reaches 8.8% next year and house prices drop a further 14%. In the second scenario, joblessness rises to 10.3% and property slips another 22%.
Banks facing a shortfall under the model will have to come up with a plan to raise additional capital by mid June.
If they cannot do so independently, they may have to turn to the government's £466 billion financial bailout fund.
sourced from Runcorn and Widnes Weekly News
Saturday, 18 July 2009
Indicators of economic depression ending-- Google searches vs. job losses
read the full article at examiner.com
Larry Summers, Obama's top economic advisor has summed up the state of the economy today in what Forbes online is calling "promising", but somewhat "obscure" signs of recovery.
The Job Impact of the American Recovery and Reinvestment Plan
- "Earlier this year traders were betting there was a one-in-six chance that the Dow would fall below 5,000, he said. Now they say it's one-in-a-hundred.
- The chances that corporate bonds will default has fallen by a third.
- And Google searches for 'economic depression,' which surged to quadruple their normal levels, have since returned to normal. (A growing number of economists do believe that the recession has ended or will end in coming months.)"
read the full article at examiner.com
Indicators of economic depression ending-- Google searches vs. job losses
read the full article at examiner.com
Larry Summers, Obama's top economic advisor has summed up the state of the economy today in what Forbes online is calling "promising", but somewhat "obscure" signs of recovery.
The Job Impact of the American Recovery and Reinvestment Plan
- "Earlier this year traders were betting there was a one-in-six chance that the Dow would fall below 5,000, he said. Now they say it's one-in-a-hundred.
- The chances that corporate bonds will default has fallen by a third.
- And Google searches for 'economic depression,' which surged to quadruple their normal levels, have since returned to normal. (A growing number of economists do believe that the recession has ended or will end in coming months.)"
read the full article at examiner.com
Sunday, 7 June 2009
NEW blog in development
[caption id="attachment_571" align="aligncenter" width="310" caption="allaboutgrub"]
[/caption]
- this blog is all about food, ingredients and where to buy good quality food from - add a marker to my allaboutgrub map to tell others about great places to eat out or places to buy great food from -
[/caption]Hi all, I have been developing a new blog please come and visit it
allaboutgrub.wordpress.com
- this blog is all about food, ingredients and where to buy good quality food from - add a marker to my allaboutgrub map to tell others about great places to eat out or places to buy great food from -
"go on share your food experiences with others"
NEW blog in development
[caption id="attachment_571" align="aligncenter" width="310" caption="allaboutgrub"][/caption]
- this blog is all about food, ingredients and where to buy good quality food from - add a marker to my allaboutgrub map to tell others about great places to eat out or places to buy great food from -
[/caption]Hi all, I have been developing a new blog please come and visit it
allaboutgrub.wordpress.com
- this blog is all about food, ingredients and where to buy good quality food from - add a marker to my allaboutgrub map to tell others about great places to eat out or places to buy great food from -
"go on share your food experiences with others"
Wednesday, 11 March 2009
Obama calls for G20 joint action
US President Barack Obama has said that countries must take concerted action to spur global economic growth.
President Obama called for both stimulus and regulatory reforms
President Obama was speaking ahead of this weekend's meeting of G20 finance ministers in West Sussex near London.
He said the US had two goals at the G20 - to ensure joint action to jump-start economies and to move forward on a regulatory reform agenda.
He added that he was optimistic about the meeting's prospects. "We are in this together," he said.
Earlier, UK Chancellor Alistair Darling had also called for co-ordinated global action.
"We must work together not as a small group of advanced economies but globally, including the emerging and developing economies," he told reporters in London.
Growing rift
The finance ministers meet ahead of the main G20 summit of world leaders in London on 2 April.
 |  It's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together  US President Barack Obama  |
President Obama's comments came amid reports of a growing rift between the US and Europe over the G20 in recent weeks.
Washington has been calling for more spending plans, while most European leaders have been pressing for increased global regulation of the financial system.
Speaking at a meeting in the Oval Office with Treasury Secretary Timothy Geithner, Mr Obama said the $787bn stimulus package he signed into law last month was "doing a good job" stimulating the US economy.
He added: "It's very important for the American people to understand that, as aggressive as the actions we are taking have been so far, it's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together."
On Tuesday the head of the US Federal Reserve, Ben Bernanke, also called for the revamping of the global system of financial regulation.
sourced from The BBC
Obama calls for G20 joint action
US President Barack Obama has said that countries must take concerted action to spur global economic growth.
President Obama called for both stimulus and regulatory reforms
President Obama was speaking ahead of this weekend's meeting of G20 finance ministers in West Sussex near London.
He said the US had two goals at the G20 - to ensure joint action to jump-start economies and to move forward on a regulatory reform agenda.
He added that he was optimistic about the meeting's prospects. "We are in this together," he said.
Earlier, UK Chancellor Alistair Darling had also called for co-ordinated global action.
"We must work together not as a small group of advanced economies but globally, including the emerging and developing economies," he told reporters in London.
Growing rift
The finance ministers meet ahead of the main G20 summit of world leaders in London on 2 April.
| It's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together US President Barack Obama |
President Obama's comments came amid reports of a growing rift between the US and Europe over the G20 in recent weeks.
Washington has been calling for more spending plans, while most European leaders have been pressing for increased global regulation of the financial system.
Speaking at a meeting in the Oval Office with Treasury Secretary Timothy Geithner, Mr Obama said the $787bn stimulus package he signed into law last month was "doing a good job" stimulating the US economy.
He added: "It's very important for the American people to understand that, as aggressive as the actions we are taking have been so far, it's very important to make sure that other countries are moving in the same direction, because the global economy is all tied together."
On Tuesday the head of the US Federal Reserve, Ben Bernanke, also called for the revamping of the global system of financial regulation.
sourced from The BBC
Saturday, 7 March 2009
Recession
rom recession in more than a decade and a half. One yardstick is at least two quarters of negative economic growth - and Britain has not had even one three-month period of falling output since 1992.
This unbroken record has allowed Gordon Brown to boast that the economy is enjoying its longest spell of sustained growth since the dawn of the Industrial Revolution in the 18th century, although reliable quarterly data has only been available for around half a century.
Some economists believe this definition of recession is flawed, since an economy would not be in recession if it contracted by 5% in the first quarter, expanded by 0.1% in each of the following two quarters and then contracted again by 5% in the fourth quarter.
It would, however, be deemed to be in recession if it grew by 5% in each of the first and fourth quarters but contracted by 0.1% in each of the second and third quarters. An alternative - and tougher definition - is a full calendar year of negative output.
Given the UK economy has grown on average by 2.5% over many decades, it is rare for gross domestic product (GDP) to fall on an annual basis. There have been only five such years since the end of the second world war: 1974, 1975, 1980, 1981 and 1991.
The United States has its own method of assessing recession, with the National Bureau of Economic Research's business cycle-dating committee making a judgment.
The NBER defines recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales". It has not given a definitive ruling on whether the United States is technically in recession now, but analysts believe that it will give its verdict soon.
sourced from The Guardian
This unbroken record has allowed Gordon Brown to boast that the economy is enjoying its longest spell of sustained growth since the dawn of the Industrial Revolution in the 18th century, although reliable quarterly data has only been available for around half a century.
Some economists believe this definition of recession is flawed, since an economy would not be in recession if it contracted by 5% in the first quarter, expanded by 0.1% in each of the following two quarters and then contracted again by 5% in the fourth quarter.
It would, however, be deemed to be in recession if it grew by 5% in each of the first and fourth quarters but contracted by 0.1% in each of the second and third quarters. An alternative - and tougher definition - is a full calendar year of negative output.
Given the UK economy has grown on average by 2.5% over many decades, it is rare for gross domestic product (GDP) to fall on an annual basis. There have been only five such years since the end of the second world war: 1974, 1975, 1980, 1981 and 1991.
The United States has its own method of assessing recession, with the National Bureau of Economic Research's business cycle-dating committee making a judgment.
The NBER defines recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales". It has not given a definitive ruling on whether the United States is technically in recession now, but analysts believe that it will give its verdict soon.
sourced from The Guardian
Recession
rom recession in more than a decade and a half. One yardstick is at least two quarters of negative economic growth - and Britain has not had even one three-month period of falling output since 1992.
This unbroken record has allowed Gordon Brown to boast that the economy is enjoying its longest spell of sustained growth since the dawn of the Industrial Revolution in the 18th century, although reliable quarterly data has only been available for around half a century.
Some economists believe this definition of recession is flawed, since an economy would not be in recession if it contracted by 5% in the first quarter, expanded by 0.1% in each of the following two quarters and then contracted again by 5% in the fourth quarter.
It would, however, be deemed to be in recession if it grew by 5% in each of the first and fourth quarters but contracted by 0.1% in each of the second and third quarters. An alternative - and tougher definition - is a full calendar year of negative output.
Given the UK economy has grown on average by 2.5% over many decades, it is rare for gross domestic product (GDP) to fall on an annual basis. There have been only five such years since the end of the second world war: 1974, 1975, 1980, 1981 and 1991.
The United States has its own method of assessing recession, with the National Bureau of Economic Research's business cycle-dating committee making a judgment.
The NBER defines recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales". It has not given a definitive ruling on whether the United States is technically in recession now, but analysts believe that it will give its verdict soon.
sourced from The Guardian
This unbroken record has allowed Gordon Brown to boast that the economy is enjoying its longest spell of sustained growth since the dawn of the Industrial Revolution in the 18th century, although reliable quarterly data has only been available for around half a century.
Some economists believe this definition of recession is flawed, since an economy would not be in recession if it contracted by 5% in the first quarter, expanded by 0.1% in each of the following two quarters and then contracted again by 5% in the fourth quarter.
It would, however, be deemed to be in recession if it grew by 5% in each of the first and fourth quarters but contracted by 0.1% in each of the second and third quarters. An alternative - and tougher definition - is a full calendar year of negative output.
Given the UK economy has grown on average by 2.5% over many decades, it is rare for gross domestic product (GDP) to fall on an annual basis. There have been only five such years since the end of the second world war: 1974, 1975, 1980, 1981 and 1991.
The United States has its own method of assessing recession, with the National Bureau of Economic Research's business cycle-dating committee making a judgment.
The NBER defines recession as "a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production and wholesale-retail sales". It has not given a definitive ruling on whether the United States is technically in recession now, but analysts believe that it will give its verdict soon.
sourced from The Guardian
Friday, 6 March 2009
US jobless rate increases to 8.1%
The US jobless rate jumped in February to 8.1%, according to official figures from the Labor Department. The number of people out of work rose by 651,000 during the month. Both figures were bigger than expected. The number of job cuts in January was revised up to 655,000 while December's losses were pushed up to 681,000. December's figure was the biggest job loss in a single month since October 1949. The unemployment rate was the highest since December 1983.
Rising unemployment has meant greater demand for free meals President Obama said that the number of jobs lost so far in the recession was "astounding". Speaking in Ohio, he added: "I don't need to tell the people of this state what statistics like this mean," saying that he had signed his economic stimulus package in order to save jobs. The extra 161,000 jobs added to December and January's figures mean that almost two million jobs have been lost in the past three months. A total of 12.5 million people are now unemployed in the US. "It just continues to show the grim state of the labour market, which suggests a deepening US recession," said Joe Manimbo, currency trader at Ruesch International in Washington. Across sectors There were further signs of companies cutting back on their spending with the news that the number of people who wanted to work full-time but were forced to work part-time for economic reasons rising 787,000 to 8.6 million.
The average working week stood at 33.3 hours, matching the record low set in December. Jobs were cut in most sectors, with only government, education and health services adding staff. In the manufacturing sector 168,000 jobs were cut in the month while 104,000 jobs went in construction and 375,000 were cut in the service sector. "The payroll numbers are very weak. With the revisions, we've had significant job losses in the past four months," said Gary Thayer, senior economist at Wachovia Securities in St Louis. "Companies are reducing workers and output in order to bring inventories into line with weak sales." Among the companies that announced big job cuts in February were Goodyear, Estee Lauder, Macy's and General Motors. Federal Reserve Chairman Ben Bernanke told Congress earlier in the week that economic indicators "show little sign of improvement" and suggest that "labour market conditions may have worsened further in recent weeks". | ||
US jobless rate increases to 8.1%
The US jobless rate jumped in February to 8.1%, according to official figures from the Labor Department. The number of people out of work rose by 651,000 during the month. Both figures were bigger than expected. The number of job cuts in January was revised up to 655,000 while December's losses were pushed up to 681,000. December's figure was the biggest job loss in a single month since October 1949. The unemployment rate was the highest since December 1983.
Rising unemployment has meant greater demand for free meals President Obama said that the number of jobs lost so far in the recession was "astounding". Speaking in Ohio, he added: "I don't need to tell the people of this state what statistics like this mean," saying that he had signed his economic stimulus package in order to save jobs. The extra 161,000 jobs added to December and January's figures mean that almost two million jobs have been lost in the past three months. A total of 12.5 million people are now unemployed in the US. "It just continues to show the grim state of the labour market, which suggests a deepening US recession," said Joe Manimbo, currency trader at Ruesch International in Washington. Across sectors There were further signs of companies cutting back on their spending with the news that the number of people who wanted to work full-time but were forced to work part-time for economic reasons rising 787,000 to 8.6 million.
The average working week stood at 33.3 hours, matching the record low set in December. Jobs were cut in most sectors, with only government, education and health services adding staff. In the manufacturing sector 168,000 jobs were cut in the month while 104,000 jobs went in construction and 375,000 were cut in the service sector. "The payroll numbers are very weak. With the revisions, we've had significant job losses in the past four months," said Gary Thayer, senior economist at Wachovia Securities in St Louis. "Companies are reducing workers and output in order to bring inventories into line with weak sales." Among the companies that announced big job cuts in February were Goodyear, Estee Lauder, Macy's and General Motors. Federal Reserve Chairman Ben Bernanke told Congress earlier in the week that economic indicators "show little sign of improvement" and suggest that "labour market conditions may have worsened further in recent weeks". | ||
Sunday, 15 February 2009
US House passes Obama's economic stimulus bill
House votes 246-183 to pass Obama $787bn (£547bn) plan to resuscitate the economy
The US House of Representatives has passed a $787bn (£547bn) plan to resuscitate the economy, handing President Barack Obama a big victory.
The measure passed 246-183, with no Republican votes. It will now go to the Senate, where a vote is expected later today.
The eight-inch-thick stimulus bill combines tax cuts for individuals and businesses with half a trillion dollars in government spending for infrastructure, health care and help for cash-starved state governments. Older Americans would get a $250 bonus social security check.
Seven Democrats voted against the bill.
Obama claims that the plan will save or create 3.5m jobs. But Republicans said it will not work because it has too little in tax cuts and spreads too much money around to everyday projects like computer upgrades for federal agencies.
Sourced from The Guardian
The US House of Representatives has passed a $787bn (£547bn) plan to resuscitate the economy, handing President Barack Obama a big victory.
The measure passed 246-183, with no Republican votes. It will now go to the Senate, where a vote is expected later today.
The eight-inch-thick stimulus bill combines tax cuts for individuals and businesses with half a trillion dollars in government spending for infrastructure, health care and help for cash-starved state governments. Older Americans would get a $250 bonus social security check.
Seven Democrats voted against the bill.
Obama claims that the plan will save or create 3.5m jobs. But Republicans said it will not work because it has too little in tax cuts and spreads too much money around to everyday projects like computer upgrades for federal agencies.
Sourced from The Guardian
Brown under siege as Congress caps bankers' bonuses
A dramatic vote on Capitol Hill is set to bring major change to Wall Street's risk culture as cash incentives for executives, brokers and traders are limited to a third of their salaries. Gaby Hinsliff, Zoe Wood and Paul Harris report on the implications for Britain.
Gordon Brown was under rising pressure to clamp down on the City's bonus culture last night after the US Congress agreed to drastic curbs capping senior bankers' bonuses at a third of their salary.
The measures, which are expected to be signed into law by President Barack Obama (Barack Obama page on the Guardin website) this week, would apply to dozens of staff at American banks bailed out by the taxpayer and could cost Wall Street's wealthiest millions. Cash bonuses would be banned in favour of long-term share options, with the restrictions extending beyond a handful of top executives to senior brokers and traders.
read full article from The Gardian
Gordon Brown was under rising pressure to clamp down on the City's bonus culture last night after the US Congress agreed to drastic curbs capping senior bankers' bonuses at a third of their salary.
The measures, which are expected to be signed into law by President Barack Obama (Barack Obama page on the Guardin website) this week, would apply to dozens of staff at American banks bailed out by the taxpayer and could cost Wall Street's wealthiest millions. Cash bonuses would be banned in favour of long-term share options, with the restrictions extending beyond a handful of top executives to senior brokers and traders.
read full article from The Gardian
Brown under siege as Congress caps bankers' bonuses
A dramatic vote on Capitol Hill is set to bring major change to Wall Street's risk culture as cash incentives for executives, brokers and traders are limited to a third of their salaries. Gaby Hinsliff, Zoe Wood and Paul Harris report on the implications for Britain.
Gordon Brown was under rising pressure to clamp down on the City's bonus culture last night after the US Congress agreed to drastic curbs capping senior bankers' bonuses at a third of their salary.
The measures, which are expected to be signed into law by President Barack Obama (Barack Obama page on the Guardin website) this week, would apply to dozens of staff at American banks bailed out by the taxpayer and could cost Wall Street's wealthiest millions. Cash bonuses would be banned in favour of long-term share options, with the restrictions extending beyond a handful of top executives to senior brokers and traders.
read full article from The Gardian
Gordon Brown was under rising pressure to clamp down on the City's bonus culture last night after the US Congress agreed to drastic curbs capping senior bankers' bonuses at a third of their salary.
The measures, which are expected to be signed into law by President Barack Obama (Barack Obama page on the Guardin website) this week, would apply to dozens of staff at American banks bailed out by the taxpayer and could cost Wall Street's wealthiest millions. Cash bonuses would be banned in favour of long-term share options, with the restrictions extending beyond a handful of top executives to senior brokers and traders.
read full article from The Gardian
Monday, 9 February 2009
Wall Street bankers nervous in face of tough congressional grilling
The heads of Wall Street's biggest banks struggled nervously to defend the financial industry's culture of multi-million-dollar bonus payments as they faced a showdown with lawmakers on Capitol Hill today.
At a tense and closely watched hearing, the House financial services committee questioned the chief executives of eight top banks – Goldman Sachs, JP Morgan, Bank of New York Mellon, Bank of America, State Street, Morgan Stanley, Citigroup and Wells Fargo.
Barney Frank, the Democratic chairman of the committee, demanded to know why the chiefs needed bonuses to motivate them to work: "Why do you need to be bribed to have your interests aligned with shareholders?" He wondered whether the eight chief executives would work shorter hours – or take longer lunches – without the payments.
Morgan Stanley's boss, John Mack, replied: "We love what we do. If you gave me no bonus in the best of years, I'd still be here."
A New York congresswoman, Carolyn Maloney, asked why Merrill Lynch staff shared nearly $4bn of bonuses just before the firm was taken over by Bank of America in a rescue deal which required government aid. "How can you justify paying bonuses to managers who were running the company into the ground to the point where it was forced into a merger?" she asked. "Could this reasonably be described as looting the company prior to the merger?"
Bank of America's chief executive, Ken Lewis, said his firm had urged Merrill to reduce the bonuses but that the brokerage was an independent public company until the takeover was complete: "We had no authority to tell them what to do – just to urge them what to do."
In opening statements before the committee, several of the bank bosses offered a degree of contrition over the industry's role in the financial crisis.
Citigroup's chief executive, Vikram Pandit, apologised for trying to buy a $50m corporate jet after receiving $45bn of taxpayers' money. "We did not act quickly enough to adjust to the new world," he said. "I take personal responsibility for that mistake."
In a rare collective appearance, the eight rival bank chiefs were warned that they face much greater public scrutiny because of their receipt of public funds.
Paul Kanjorski, a Democratic congressman from Pennsylvania, told them: "As executives of large corporations, you once lived in a one-way mirror unaccountable to the public at large and often sheltered from scrutiny. When you took taxpayers money, you moved into a fishbowl."
Under questioning from the committee, the banking chiefs agreed that credit cards could pose the next major problem in the financial crisis. As unemployment rises, millions of jobless Americans are expected to default on credit card debt.
"Clearly this is going to be an awful year for the credit card industry," said Bank of America's chief executive Ken Lewis, who warned that unemployment of between 8% and 8.5% would cause "very high loss rates" on cards.
In written evidence prior to the hearing, Goldman Sachs's chief executive, Lloyd Blankfein, conceded that his industry had a serious image problem: "In my 26 years at Goldman Sachs, I have never seen a wider gulf between the financial services industry and the public."
He accepted that there were grounds for criticism: "Many people believe – and, in many cases, justifiably so – that Wall Street lost sight of its larger public obligations and allowed certain trends and practices to undermine the financial system's stability."
But the bankers shrugged off accusations that they are refusing to lend, offering statistics to show their firms' willingness to extend credit. JP Morgan's chief executive, Jamie Dimon, told lawmakers that his bank made $150bn in new loans during the final quarter of 2008, including $50bn to consumers, $20bn to small businesses and $90bn to corporate clients.
sourced from The Guardian
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