Two months after ending his annual State of the Black Union conference, Tavis Smiley is gathering African-American advocates to press the case for a “black agenda.”

The decision was motivated by what Smiley called recent statements from some black leaders downplaying the need for President Barack Obama to specifically help African-Americans.

“I was compelled to do it because of this debate,” the activist and PBS talk show host said Wednesday.

The panel discussion will be March 20 at Chicago State University. Panelists include advertising pioneer Tom Burrell, professors Michael Eric Dyson and Cornel West, Nation of Islam leader Louis Farrakhan, the Rev. Jesse Jackson, and Bennett College President Julianne Malveaux.

The meeting is free and open to the public. Negotiations to televise the event are in progress, Smiley spokeswoman Leshelle Sargent said.

Some black politicians and activists have recently begun to question Obama’s longtime stance that helping the overall economy will improve the fortunes of blacks who are disproportionately poor and unemployed.
…
Eric Deggans, who writes about the media and race for Florida’s St. Petersburg Times, said Smiley’s new event is consistent with his record of criticizing Obama’s race-neutral stance. But there is a perception that Smiley is personally invested in the issue, he said, because Obama declined to attend Smiley’s 2008 State of the Black Union event during the presidential campaign.

Source/Full Story: The Associated Press

Barack Obama’s home state of Illinois is near the point of fiscal disintegration. “The state is in utter crisis,” said Representative Suzie Bassi. “We are next to bankruptcy. We have a $13bn hole in a $28bn budget.”

The state has been paying bills with unfunded vouchers since October. A fifth of buses have stopped. Libraries, owed $400m (£263m), are closing one day a week. Schools are owed $725m. Unable to pay teachers, they are preparing mass lay-offs. “It’s a catastrophe”, said the Schools Superintedent.

In Alexander County, the sheriff’s patrol cars have been repossessed; three-quarters of his officers are laid off; the local prison has refused to take county inmates until debts are paid.

Florida, Arizona, Michigan, New Jersey, Pennsylvania and New York are all facing crises. California has cut teachers salaries by 5pc, and imposed a 5pc levy on pension fees.

The Economic Policy Institute says states face a shortfall of $156bn in fiscal 2010. Most are banned by law from running deficits, so they must retrench. Washington has provided $68bn in federal aid, but that depletes the Obama stimulus package.

Source/Full Story: Don’t go wobbly on us now, Ben Bernanke – Telegraph

If only Brown would have lost…

Collateral damage from President Barack Obama’s battle with the banks was strewn across the global financial theatre on Friday, as traders feared that similar proposals could be adopted in other trading centres and investors worried about the impact the move could have on fragile market sentiment.

“What the Obama administration is proposing may sound like a good idea to regulators trying to cut down ‘too big to fail’ financial institutions and remove the risk from the banking sector that is the financial life-blood of the economy,” said strategists at Royal Bank of Scotland.

“However, it is potentially a major overhaul of the whole financial sector, creating enormous uncertainty.”

The mood was not helped by a further exchange of verbal fire between Washington and Beijing over internet censorship and cyber attacks, a dispute that some fear could develop into a trade war.

And those bulls hoping for succour from the US fourth-quarter earnings season will have been disappointed, again, by the reaction to Google’s numbers overnight. The company that is a verb smashed analysts’ forecasts but saw its shares fall 5 per cent in out-of-hours trading.

Source/Full Story: FT.com

U.S. and EU authorities are expected to hammer out the definite shape of a new regulatory order in 2010 that will fundamentally change how world banks and markets operate.

Stricter limits on leverage and capital will emerge, leading eventually to slimmer profits for banks, policy analysts said. Formerly unregulated off-exchange derivatives markets will have to conform to new procedures.

Lenders’ power to package and securitize mortgages and other forms of debt will face new limits, while hedge funds — once the darlings of high finance — will face new scrutiny.

Procedural hurdles remain to be crossed by reform advocates. In the United States, the Senate has not yet approved a reform bill, but the House of Representatives has.

Banking lobbyists and Republicans are working to block reforms. Senate debate will resume this month, with analysts expecting passage of legislation in early spring. The Senate and House will then have to agree on a single measure to send to President Barack Obama. That could happen in April or May.

In Europe, EU member states and the European Parliament must still rule on a range of proposed regulations for banks, markets, insurers, hedge funds and private equity groups.

But it all looks to be on track for adoption, barring unforeseen political shocks, analysts said.

“The reform package will be more far-reaching than anything we’ve seen since the Great Depression, and there is a high likelihood it will pass,” said the Eurasia Group, a research and consulting firm that closely follows Washington politics.

“Upcoming midterm elections (in America) will encourage populist approaches,” the group said in a research note.

Source/Full Story:  Reuters

Senate Democrats overcame a Republican filibuster to clear the way for a vote Sunday on a huge end-of-year $1.1 trillion spending bill that includes money to run much of the government and pay for Medicare and Medicaid benefits.

The spending measure gives the Education Department, the State Department, the Department of Health and Human Services and others generous budget increases far exceeding inflation.

On Saturday, the Democratic controlled Senate voted 60-34 to end the GOP filibuster that threatened to hold up the legislation. A final vote was set for Sunday afternoon whether to send the measure to President Barack Obama.

Democrats held Saturday’s vote open for an hour to accommodate Independent Sen. Joe Lieberman of Connecticut, an Orthodox Jew who walked more than three miles to the Capitol to vote on the Sabbath after attending services at his synagogue. Lieberman, wearing a black wool overcoat and bright orange scarf, finally provided the crucial 60th vote.

Source/Full Story: Yahoo! News

Gold is at a new high this morning, @ 1,165.96

Visitors to America might have noticed the television ads urging us to buy gold. One such “spokesman”, formerly in charge of managing the government’s hoard of the yellow stuff, including the ingots buried at Fort Knox, points out that the value of gold has never fallen to zero. Why investors are expected to find such a modest claim reassuring I can’t imagine. But something is persuading people to buy gold, driving the price to and past $1,100 per ounce, from about $270 at the beginning of this decade, and around $700 when the financial crisis first hit.

This is not mere panic buying by a herd of small investors trying to benefit from what is called a momentum play. John Paulson (no relation to Hank), the investor who made $20 billion for his hedge fund between 2007 and 2009 by betting on a collapse of the financial and housing markets, is betting on gold in a big way. Paulson & Co already holds $3 billion in gold-related investments (including AngloGold Ashanti and Kinross Gold), and Paulson has just seeded a new gold-related fund with some $250m of his own funds. His modest objective: appreciation at a rate higher than the increase in the price of gold itself.

All of this means that investors do not believe that President Barack Obama will respond to the enormous pressure put on him during his visit to Beijing and take steps to strengthen the dollar. The president and Treasury secretary Timothy Geithner might talk the talk of a strong dollar but they walk the walk of a declining one. A weak dollar should lift exports and cut imports, which in White House terms means jobs for American workers. And it is jobs that the president asks his aides about first thing every morning. With reason.

Should the unemployment rate remain in double digits when elections roll round a year from now, Republicans would gain congressional seats by making the plausible claim that the Democrats’ deficit spending served only to create a debt burden that will weigh down the living standards of our children and grandchildren.

Source/Full Story: Times Online
Technorati Tags: Gold

An influential US Senate committee has proposed a sweeping overhaul of the country’s regulatory architecture that would strip powers from the Federal Reserve and create a single banking regulator.

Chris Dodd, chairman of the Senate banking committee, on Tuesday presented a more radical vision of regulatory reform than that proposed by the Obama administration. The move ushered into the open a behind-the-scenes struggle between banks, policymakers and regulators.

Democrats lined up behind Mr Dodd as he presented the bill. But senior Republicans were missing from a press conference in spite of attempts by President Barack Obama to secure their support for one of his most important legislative goals.

The proposal to consolidate regulators faces strident opposition from the Fed, the Federal Deposit Insurance Corporation and smaller regulators, which argue they are best placed to supervise banks.

Mr Dodd said most institutions should benefit from a regulator that would provide “clarity, cut red tape and make it easier to compete”, but banks would “no longer be able to shop for the weakest regulator”.

Source/Full Story: FT.com
Technorati Tags: Federal Reserve

What economic challenges are still ahead? I thought the economy was recovering, and green shoots abound.

US unemployment surged above 10 per cent for the first time in more than a quarter of a century in October, increasing political pressure on the Obama administration.

According to figures revealed on Friday, the unemployment rate rose to 10.2 per cent, its highest since 1983, as companies continued to shed jobs in spite of a return to economic growth. Non-farm payrolls were down 190,0000, slightly more than analysts expected, taking the total of jobs lost since the recession began to 7.3m.

In a televised statement, President Barack Obama called the unemployment rate “a sobering number that underscores the economic challenge ahead”.

Source/Full Story: FT.com

White House economic adviser Paul Volcker said his meeting on Monday with President Barack Obama focused in part on reducing U.S. economic reliance on consumer spending.

The alternatives to help bolster future economic growth include boosting exports, applying innovative technology to green issues and improving the nation’s infrastructure, Volcker said.

The former Federal Reserve chairman, who now heads the White House Economic Recovery Advisory Board, said Obama understands that “We cannot have so much consumption.”

Consumer spending accounted for 70 percent of the U.S. economy before last year’s economic meltdown, a level that Volcker said was sustained only by “the magic of financial engineering.”

“We cannot rebuild the economy to the tune of 70 percent consumption or housing booms. It will just break down again,” Volcker said.

Source/Full Story:  Reuters
Technorati Tags: consumer spending

In Washington and on Main Street, politicians and voters are railing against Wall Street’s multi- million-dollar pay packages. In the financial world, most executives expect their bonuses to match or exceed last year’s, with 1 in 10 predicting their best-ever payout.

Having shaken off the biggest economic decline since the 1930s, almost three in five traders, analysts and fund managers believe their 2009 bonuses will either increase or won’t change, according to a quarterly poll of Bloomberg customers. Only one in four see a decline. Asians are the most optimistic about pay and Americans and Europeans somewhat less so.

“The large banks are knocking the cover off the ball,” said Daniel Alpert, managing director of New York-based investment bank Westwood Capital LLC. The industry is “making money, though with government help.”

Worldwide, a majority of market professionals in the survey also turn thumbs down on government attempts to limit compensation, with 51 percent saying restrictions will stifle useful innovation. Only about 38 percent think pay limits will control excessive risk-taking.

In the U.S., where President Barack Obama has chided Wall Street for being “motivated only by the appetite for quick kills and bloated bonuses,” 65 percent say the restrictions will damp innovation.

The Bloomberg Global Poll of investors and analysts in six continents was conducted Oct. 23-27. It is based on interviews with a random sample of 1,452 Bloomberg subscribers, representing decision makers in markets, finance and economics. The poll has a margin of error of plus or minus 2.6 percentage points.

Source/Full Story: Bloomberg.com

The US government is preparing to order bailed-out banks and car companies to slash the cash salaries of their top executives by an average of 90% in an effort to quell outrage over multimillion-dollar boardroom excess.

Kenneth Feinberg, the US treasury’s so-called pay tsar charged with vetting remuneration, intends to tell seven struggling firms still dependant on taxpayer dollars that their 25 highest-paid executives must accept severe year-on-year cuts. The biggest drops will be in salaries. But after taking into account bonuses, stock options and other elements, total pay packages are set to fall by an average of about 50%.

Feinberg’s power only extends to companies that are yet to repay government aid. The firms concerned include the struggling banks Citigroup and Bank of America, plus the insurer AIG.

Also on the list are the Detroit car manufacturers General Motors and Chrysler, and the car companies’ financing arms, Chrysler Financial and GMAC.

A mediation specialist formerly responsible for settling compensation claims for victims of the September 11 terrorist attacks, Feinberg has spent the last two months scrutinising pay proposals submitted by bailed-out businesses. His findings, due to be formally released within the next week, were leaked to US media yesterday.

Several individuals have already acquiesced to Feinberg’s will. Bank of America’s soon to retire chief executive, Ken Lewis, last week announced that he will forgo his $1.5m (£900,000) salary this year, under pressure from Feinberg.

Other ordinances will require any “frills” worth more than $25,000, such as country club membership, limousines or private aircraft, to be subject to government approval. And Feinberg is likely to insist on a division between the roles of chairman and chief executive.

Source/Full Story: guardian.co.uk
Technorati Tags: Kenneth Feinberg

President Barack Obama wants smaller community banks to have greater access to the government’s $700 billion financial rescue fund as the administration refocuses the bailout money on small businesses and homeowners and winds down programs aimed at big banks.

Obama on Wednesday plans to announce a package of initiatives designed to increase lending, including a request that Congress increase caps for existing Small Business Administration loans, the administration said.

The new effort comes as the administration is under pressure from liberals to shift the massive bailout fund’s spending away from big financial institutions and toward reducing foreclosures and creating jobs. But it also comes as Republicans press Obama to end the rescue program and use bank repayments to reduce the national debt.

An administration official said the Treasury Department intends wind down and terminate bailout programs launched at the height of the financial crisis to stabilize Wall Street and aid the struggling auto industry.

The official, speaking on the condition of anonymity because the details had not yet been made public, said the $218 billion Capital Purchase Program would effectively conclude at the end of the year. The program has been a central element of the bailout program, infusing banks with government money in exchange for preferred stock.

The administration also plans to cap two programs at levels below initial projections. One program designed to rid big banks of their bad assets will spend $30 billion instead of $75 billion, and another that supports a Federal Reserve effort to ease bank credit will top off at $30 billion instead of $80 billion. An initiative aimed at banks — the Capital Assistance Program — had no applicants and will also end, the official said.

Source/Full Story: FOXNews.com

The Social Security Administration makes it official Thursday: There will be no cost of living increase for Social Security recipients next year, the first year without one since automatic adjustments were adopted in 1975.

The announcement comes as President Barack Obama and key members of Congress call for a second round of $250 payments to more than 50 million seniors, veterans, retired railroad workers and people with disabilities.

The payments would be equal to about a 2 percent increase for the average Social Security recipient. The cost: $13 billion.

Obama called on Congress Wednesday to approve the payments, and several key members of Congress said they would.

“This additional assistance will be especially important in the coming months, as countless seniors and others have seen their retirement accounts and home values decline as a result of this economic crisis,” Obama said in a statement.

Blame falling consumer prices for no automatic increase next year. By law, Social Security’s cost-of-living adjustment, or COLA, is pegged to inflation, which was negative this year, due largely to falling energy costs.

Source/Full Story: Yahoo! News
Technorati Tags: Social Security, COLA

President Barack Obama has “tremendous confidence” in Timothy Geithner, the US Treasury Secretary, even though he has spoken to executives from Citigroup, Goldman Sachs and other banks more than 80 times in his first seven months in office, the President’s spokesman Robert Gibbs said last night

A Freedom of Information request by Associated Press revealed that Mr Geithner had spoken most often to Lloyd Blankfein, having met or spoken to the chief executive of Goldman Sachs more than 15 times between January and July – a revelation likely to fuel conspiracy theorists who believe that the bank has an undue influence on Government policy.

Associated Press speculated that Mr Geithner’s closeness to the banks could be considered inappropriate given that his department oversaw the sector’s bailout with billions of dollars of taxpayers’ funds and plays a role in the banks’ regulation.

Mr Gibbs said: “Secretary Geithner is somebody who has helped steer the financial sector back to stability and has worked on a range of issues and will be heavily involved in regulatory reform as we go forward.”

Citigroup was the bank that had the most communication overall with the Treasury Secretary, usually via chairman Richard Parsons or chief executive Vikram Pandit.

The Government has a 34 per cent stake in Citigroup, which it bailout out with $45 billion, although President Obama has insisted that he does not want to take a hand in running the business.

Jamie Dimon, JPMorgan Chase’s chief executive, talked regularly to Mr Geithner, as did Larry Fink, chief executive of BlackRock, the fund manager that runs one of the Treasury’s public-private funds set up to buy toxic credit assets.

Bank of America, however, did not talk regularly to the Treasury Secretary, despite holding $45 billion in bailout funds. The bank is the subject of numerous investigations into its Government-sponsored takeover of Merrill Lynch last year.

Source/Full Story:  Times Online
Technorati Tags: Timothy Geithner, Lloyd Blankfein, Goldman Sachs

Former Federal Reserve Chairman Alan Greenspan predicted on Sunday that the jobless rate will pass 10 per cent and stay there for a while, and a second stimulus plan is not needed now.

He spoke favourably of extending unemployment benefits and tax credits for health insurance, options the Obama administration is considering for helping people laid off during the recession. With more than 15 million people out of work, unemployment reached 9.8 per cent in September, the highest rate in 26 years.

“This is an extraordinary period and temporary actions must be taken, especially to assuage the angst of a very substantial part of our population,” Mr. Greenspan said on ABC’s This Week .

“I don’t actually consider those types of actions stimulus programs. I think that they are essentially programs which support people – essentially their living standards in part. I grant you it has a stimulus effect, but that would be my primary focus,” he said.

Calling the jobs report released Friday “pretty awful,” Mr. Greenspan said he is particularly concerned with statistics showing the number of people out of work for six months or more has reached 5 million after going up sharply last month.

“People who are out of work for very protracted periods of time lose their skills eventually,” he said. “What makes an economy great is a combination of the capital assets of the economy and the people who run it. And if you erode the human skills that are involved there, there is a real and, in one sense, an irretrievable loss.”

Looking ahead on the unemployment picture, he said his “own suspicion is that we’re going to penetrate the 10 per cent barrier and stay there for a while before we start down.”

The former Fed chief said he would recommend that President Barack Obama focus on trying to get the economy going but without doing so much that the government’s action are counterproductive. With growth for the third quarter appearing to reach or surpass 3 per cent, Mr. Greenspan said he would not propose a second stimulus package.

“In my judgment it’s far better to wait and see how this momentum that has already begun to develop in the economy carries forward,” he said.

Mr. Greenspan against expressed his concern over the growing size of the federal deficit and the federal debt.

Sen. Evan Bayh, who’s on the Senate Banking, Housing and Urban Affairs Committee, said he, too, is waiting for the remainder of the job-related stimulus initiatives to take effect.

“If I’d been drafting the package, I would have tried to have it go into effect sooner and have more of it directly related to jobs,” Mr. Bayh, a Democrat from Indiana, said on Fox News Sunday. “But it is what it is at this point. It continues to go into the economic bloodstream and to keep things, which, as unsatisfying as they are, from being a whole lot worse.”

Source/Full Story:  The Globe and Mail
Technorati Tags: Alan Greenspan, unemployment