NYT: Still on the Job, but at half the pay:
“In recent decades, layoffs were the standard procedure for shrinking labor costs. Reducing the wages of those who remained on the job was considered demoralizing and risky: the best workers would jump to another employer. But now pay cuts, sometimes the result of downgrades in rank or shortened workweeks, are occurring more frequently than at any time since the Great Depression.”
WSJ: Too cash-strapped:
“One of the biggest questions facing the U.S. economy is when businesses will feel confident enough to do the kind of investment and hiring that could sustain a recovery. If you believe the reasons they list when they borrow money, the outlook isn’t too good.
In the first nine months of 2009, companies around the world borrowed about $2.3 trillion by issuing investment-grade corporate bonds — more than in any entire year on record, according to data provider Dealogic. When they issue the bonds, they typically tell investors why they’re doing it, valuable information that Dealogic records.
Only 10 of the largest 100 bond deals globally, and only 12 of the 100 biggest U.S. deals, were purportedly for expansion, capital expenditures, investments or project finance. For nonfinancial companies, the picture was even starker: 9 out of the top 100 deals globally, and 6 out of the top 100 in the U.S., were investment-related.
For the most part, the companies’ explanations for their borrowing suggest they’re repairing their finances — or hoarding cash while the financial markets will allow it, just in case things get bad again over the next couple years. Some 28 out of the top 100 deals globally — and 65 of the top 100 non-financial deals in the U.S. — listed “refinancing,” “recapitalization,” “repay debt,” or “working capital” as their purpose. Taken as a whole, this kind of financial repair was the largest reason listed for borrowing, after the generic “general corporate purposes.”
WSJ: JP Morgan’s chilling win:
“Forget friendly tellers and the tedious task of making loans. To be successful in banking right now, what you really need are bond traders.
That's good news for a bank like J.P. Morgan Chase — whose third-quarter results ballooned on the back of strong fixed-income trading revenue — but augurs badly for financial firms dependent on traditional banking. Indeed, numbers contained in J.P. Morgan's results suggest it will be a long time before the business of making loans recovers.”
China can’t trade back to normality:
“In the absence of adequate domestic demand, China used to export excess production to hungry foreign markets. With those markets likely subdued awhile, it'll be hard for China's absolute export levels to recover fully.
That means cutting back capacity, something Beijing concedes is necessary in areas as diverse as wind power and aluminum output. That bears undesirable side effects, however, like higher unemployment.
Heavy government spending and extra bank lending have papered over the cracks in China's economy so far. With a true export recovery unlikely, more painful solutions may be needed.”
CNN Money: US residential foreclosures hit record high in Q3:
“Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.
“They were the worst three months of all time,” said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.
During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.”
WSJ: Calpers rocked by Pay to Play:
“America's largest public-pension fund, Calpers, revealed that a former board member had reaped more than $50 million in fees for arranging investments that could saddle state taxpayers with hundreds of millions of dollars in losses.The disclosure deepens concerns that alleged conflicts of interest are undermining state retirement funds.
Cory’s Chart Corner
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