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Unemployment Sounds Warning About US Economy (pg. 2)
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| Halcyon+On+On |
EXACTLY.
You work for Expedia, right? Same company that makes hotel reservations for people but ends up paying the hotel like half of what it would usually charge, and keeping the other half while offering nothing to the customer but an annoying online reservations system. YOU'RE JUST A PART OF THE CORPORATION, MAN. |
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| Zharen |
| quote: | Originally posted by Beat Blog
Actually, the whole world is possible due for a recession/depression in the next decade.
China and India are experiencing severe shortages of skilled labour, which in turn pushes up prices of everything in the western world, causing a fair amount of chaos.
I don't think a recession would be too badder thing; succesive generations in the western world are getting it easier and easier these days and are becoming lazier, less skilled, and more ungrateful, and a recession would fix this. :p
Damn brats would have to walk home 5 miles in the snow and chop five tons of wood when they get there. That'll learn 'em.
/old man rant |
That's not entirely accurate. There's still a lot of us who want to work, but are faced with more of the businesses and corporations desire to outsource jobs to third world countries and illegal immigrants. And the low paying jobs that are available, aren't enough to cover things like rent, credit cards, college loans, etc. We can thank inflation and a low value dollar for that.
And it's funny how you blame the lazy and ungrateful lot of my country for this problem, when this whole mess started with the bankers, realtors and loan agents who were practicing in unscrupulous methods that caused the housing slump, which in turn, is threatening the economy with a recession.
But you're right. Punish the ones who aren't to blame in the first place. That sure will teach us. |
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| pkcRAISTLIN |
| -in before krypton and his federal reserve conspiracy nonsense. |
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| Omega_M |
Citi posts jaw dropping $ 9.8 billion loss :(
| quote: | Citi Posts $9.83 Billion Loss; Will Cut Jobs
By ERIC DASH
Published: January 15, 2008
Citigroup announced a steep cut in its stock dividend and another big investment by foreign investors on Tuesday after taking more write-downs related to subprime securities and posting a $9.83 billion loss for the fourth quarter.
Beginning what is expected to be a grim week for financial company earnings, Citigroup said it was writing down $22.2 billion because of soured mortgage-related investments and bad loans. The bank is also cutting its dividend by 41 percent and obtaining a $12.5 billion cash infusion to strengthen its balance sheet, including big investments by its former chairman, Sanford I. Weill, and the Government of Singapore Investment Corporation. Facing rising expenses and deepening losses, Citigroup is expected to embark on a major cost-cutting campaign that could result in at least 4,000 layoffs. And thousands more could be in the offing in the coming months.
The write-downs caused Citigroup to swing to a loss for the fourth quarter. The fourth-quarter loss translated into $1.99 a share, compared with a profit of $5.1 billion, or $1.03 a share, in the period a year earlier. Revenue fell 70 percent, to $7.22 billion from $23.83 billion. The write-downs included $18.1 billion from a sharp drop in the value of mortgage-related securities and heavy trading losses. The company also set aside an additional $4.1 billion to cover expected losses from bad loans.
For the full year, Citigroup reported that net income dropped 83 percent, to $3.62 billion, or 72 cents a share, compared with 2006 profit of $21.53 billion, or $4.31 a share. Revenue fell 9 percent, to $81.7 billion in 2007.
Once one of the world’s mightiest banks, Citigroup’s capital levels have been severely depleted in the fallout from the continuing credit crisis and worsening downturn in the housing market. Even with the $12.5 billion capital injection, analysts think that the bank may need even more money to shore up its balance sheet if economic conditions worsen.
“In an uncertain environment, these actions put us on our ‘front foot,’ focused on capturing opportunities that earn attractive returns for our shareholders,” Vikram S. Pandit, Citigroup’s new chief executive, said in a statement. He said the bank’s fourth-quarter results were “clearly unacceptable.”
Citigroup lined the $12.5 billion of capital through the sale of convertible preferred securities from several big investors, including two funds sponsored by cash-rich foreign governments. That comes on top of a $7.5 billion stake that the company sold to a Middle Eastern government fund, the Abu Dhabi Investment Authority, in November.
The Government of Singapore Investment Corporation will make a $6.88 billion investment, giving it one of the biggest ownership stakes in the company. The Kuwait Investment Authority, Capital Research and Management, Citigroup’s biggest shareholder, and the New Jersey Division of Investment also made large investments.
But the most interesting investments came from Mr. Weill and Prince Alwaleed bin Talal of Saudi Arabia, who met privately to discuss ousting Charles O. Prince III, Citigroup’s former chairman and chief executive, soon before he resigned in early November. Prince Alwaleed, who until recently had been Citigroup’s biggest shareholder, had bailed out the company from the real estate crisis in the early 1990s. Mr. Weill, Citigroup’s former chairman who four years ago chose Mr. Prince as his successor, has complained his own personal fortune has been hurt by the bank’s poor performance and may see this as his own personal rescue mission. Both are also large existing shareholders and their actions will prevent their ownership stakes from being more severely diluted.
Citigroup announced other actions to strengthen its finances. It will offer public investors about $2 billion in newly issued debt securities, a portion of which will be convertible. It reduced the assets held on its balance sheet by $176 billion, or 7.4 percent, by shedding mortgage-backed securities and other assets held by both its consumer and investment banking businesses. And it sold ownership stakes it held in Redecard, a Brazilian company in the credit card industry, and an investment advisory arm of Nikko Cordial, a Japanese brokerage it agreed to buy last spring.
Citigroup’s board agreed to cut the stock dividend to 32 cents from 54 cents, reversing a position it staunchly held for the last few months. The reduction could free up $4.4 billion a year but could be a significant blow to big institutional shareholders and many retail investors, who bought Citigroup shares for their retirement accounts.
The latest moves highlight the extent to which Citigroup’s capital position has weakened and raise questions about the company’s diversified business model.
“The board has been behind the ball, no doubt about it,” said Meredith A. Whitney, a banking analyst at CIBC World Markets, who has called on Citigroup to cut its dividend. “This is a company with serious capital shortfalls. The balance sheet should be the first thing that should be looked at for a bank, not the last.”
The actions are perhaps the most crucial steps taken by Mr. Pandit since he was named chief executive last month. Over the last few weeks, he has made several changes to the senior management team, including the appointment on Monday of a chief talent officer — a position that had not previously existed. He has also begun reorganizing the company, combining its investment banking and alternative investments groups and changing some of the consumer bank’s reporting lines.
Mr. Pandit is undertaking what he called “an objective, dispassionate” review of the company’s main businesses, which could result in more changes. Next month, he will also embark on a “listening tour,” visiting with Citigroup employees around the world. |
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| eRRaTiK |
| quote: | Originally posted by Ian
wait. is this the same america that Lim(FX=FA) guy is telling us is so great & beating us all at everything :p |
fkn LOL.
donald trump & robert kiyosaki - why we want you to be rich
read it. |
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| tubularbills |
i'm really curious as to how economics plays a role in the drug market. not that i'm into drugs, but it makes me wonder.
ok, so worse case scenario: the USA goes into a recession....taxes increase to get more revenue....your 2% gallon of milk becomes $4.99...gas goes up to like $4.75 a gallon...your oranges are now $1.00 a pound....and bananas are even worse....your mortgage payment just went up, your tuition just skyrocketed, and now, you're invesments have dropped.
but what about the price of pot? lsd? pcp? all that stuff. does it move with inflation? does the ecomony have any big influences on it? supply and demand? will we see meth labs shutting down because they can't pay their place is being foreclosed or can't make rent?
just some things i wonder about. |
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| Lebezniatniko |
| quote: | Originally posted by pkcRAISTLIN
-in before krypton and his federal reserve conspiracy nonsense. |
It's inevitable. The word "economics" triggers a conditioned response. |
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| leph555 |
| Thank god that i still have my Russian citizenship :D |
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| Moral Hazard |
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| chadi |
| That's because all of our jobs are in another country now. And the people who actually HAVE the jobs in America, are illegal immigrants. |
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| MrJiveBoJingles |
| quote: | Originally posted by tubularbills
but what about the price of pot? lsd? pcp? all that stuff. does it move with inflation? |
Yes, because at some point dealers will use the money they make to buy stuff in the legal economy. If inflation happens (currency depreciates), then they will start to charge more for the same thing as the dollar (or whatever currency) is devalued. Dealers are using the same dollars as everyone else, and their economic exchanges aren't really that separate from the visible economy.
The drug economy is actually a very good example of how a totally free market would work. There's no dealing with legal regulations on quality, price, salaries, or whatever. You just have supply, demand, and risk -- in this case, the occupational risk of government agents finding labs, confiscating drugs, or throwing you in jail, and the risk of dealers and addicts assaulting or killing you. The high prices of illegal drugs are an effect of high demand plus high risk -- dealers want to make very sure that they get enough money to compensate for regularly putting their freedom and possibly their lives on the line.
| quote: | | will we see meth labs shutting down because they can't pay their place is being foreclosed or can't make rent? |
Hard to say. In a bad recession you might actually see increased drug usage because people will get depressed and self-medicate, but they would also have less cash to spend. |
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| tubularbills |
| quote: | Originally posted by MrJiveBoJingles
Hard to say. In a bad recession you might actually see increased drug usage because people will get depressed and self-medicate, but they would also have less cash to spend. |
i was actually kinda kidding about that meth lab part....because i picture a meth lab in some kid's barn in the middle of iowa....where they aren't paying rent/mortgage. some old ass shack that would fall over if you pushed it hard enough. lol
interesting tho |
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