Citigroup shareholders have voted down the bank's $15 million pay package for its chief executive, Vikram Pandit. It's the first time that stock owners have united in opposition to outsized compensation at a major bank. Is this a new era of bank backlash? Eleanor Bloxham is the CEO of The Value Alliance, a board advisory firm, and Peter Morici is a macroeconomist and professor of international business at the University of Maryland. He is also the author of several books, including "Antitrust in the Global Trading System."
The main focus of Tuesday’s State of the Union address was the economy and income inequality. Along with his ideas about taxation and protecting homeowners, president Obama also expressed a desire to bring manufacturing jobs back to the U.S. Since the 1980s, the U.S. economy has shifted away from manufacturing and towards intellectual property and services. This has been due in part to the perceived expenses involved in production based in the U.S., as well as labor laws.
The Labor Department's jobs report for July, released last Friday, showed overall unemployment stayed the same at 9.5 percent, but that the economy lost 5,600 temporary jobs. This ended nine months of gradual increases. Concerned economists say temporary jobs can be seen as a leading economic indicator of how businesses will proceed in the hiring of permanent workers.
Citigroup announced its earnings this morning, ending a three-quarter profit streak with a $7.6 billion loss during the final three months of 2009. This as consumers still struggled to repay loans and the bank managed to repay its government bailout money.
The economy received some positive news on Sunday from President Obama's top economic adviser, Larry Summers, who said that the recession is over on 'This Week with George Stephanopoulos.' But even if you agree with Summers, it's still hard for many to forgive and forget the role Wall Street played in creating the current economic mess. Even President Obama recently said, "I did not run for office to be helping out a bunch of ... fat cat bankers on Wall Street." On the heels of those harsh words, Obama will be hosting the heads of those same banks at the White House Monday. Peter Morici, an economist and business professor at the University of Maryland, says this is just another publicity stunt. We're also joined by Eric Dash, a banking reporter for The New York Times, who has also been covering this story.
The Bureau of Labor Statistics releases its monthly unemployment numbers this morning. To tell us what the numbers mean, we’ve got University of Maryland economist and business professor Peter Morici. We’ll also talk with those whose jobs and businesses are represented in these numbers. Michael Powell, the president and founder of Powell’s Books in Portland, Ore., joins us to tell us how his business is making it through the recession. We also speak with Sandy Cole, an unemployed office manager who lives in St. Joseph, Mich., and is currently looking for work.
The Frankfurt Motor Show is not a happy place this year. The international car industry is reducing production as the global recession causes demand to drop sharply. Adding insult to an injured industry, Fiat CEO Sergio Marchionne told reporters that their new purchase, a small car company called Chrysler (maybe you've heard of it?) is in far worse shape than they thought. Receiving the blame for the sorry state of Chrysler is Cerberus, a private equity firm who owned the company for two years, ostensibly thinking they were making improvements. Peter Morici, professor of international business at the University of Maryland, joins us with a look at cars and the inner workings of private equity.
On the one-year anniversary of the Lehman Brothers bankruptcy, President Obama visited New York City to make a case for expanding federal regulation of Wall Street. To parse the President's speech and the impediments to regulatory reform as the economy's nosedive slows, we speak with Arthur Levitt, a senior advisor at the Carlyle Group and former chairman of the U.S. Securities and Exchange Commission. We also speak with Peter Morici, an economist and business professor at the University of Maryland.
"We have institutions, banks, who are too big to fail. The government has taken the position of salvaging just about every major financial institution in America. That has a vast, vast danger to the system. " —Arthur Levitt, senior advisor with the Carlyle Group and former Chairman of the Securities and Exchange Commission, on the danger inherent in saving large financial institutions
The last two weeks have seen a steady rally for the stock market, which closed above 9,000 on Friday. This week it'll be tested by the biggest batch of second quarter corporate profit reports yet, including those from Exxon Mobil, Chevron, and Visa. The Takeaway talks to Peter Morici, an economist and Business Professor at the University of Maryland, to figure out how the market fares in the face of those earnings reports.
On Capitol Hill, Bank of America’s acquisition of Merrill Lynch is coming under serious scrutiny. Fed Chairman Ben Bernanke is going before the committee today as lawmakers say the Fed hid some unsavory parts of the deal from other agencies in order to make the merger go through. Bank of America received billions in federal bailout funds as it struggled to absorb Merrill’s financial liabilities. For more of the story, The Takeaway talks to Peter Morici, professor of international business at the University of Maryland.
"There is always pressure present when a private company negotiates with the government."
— University of Maryland Professor Peter Morici
The financial industry is getting a makeover. Today President Obama will lay out some of the most significant changes to the U.S. financial system since the Great Depression. For a look at some of the reforms we might see, The Takeaway talks to Peter Morici. He's an economist and professor at the University of Maryland's School of Business.
"If they're too big to fail, they're often too big to sell, even in their pieces."
— Economist Peter Morici on U.S. banks
A while ago, the federal government ordered the nation's banks to under go stress tests to see how they would fare in a severe financial crisis. The results are in. So how stressed are our banks? Well the results of those tests have been delayed several times. Now they are said to be coming out on Thursday. Some financial watchers are wondering if getting the answer to that question will help relieve the stress on the economy? Treasury Secretary Timothy Geithner says so, but Peter Morici, economist and professor at the School of Business at the University of Maryland, joins The Takeaway with his thoughts on how these tests will affect the markets.
Forget TARP and get used to F.S.P. That's the Financial Stability Plan that Treasury Secretary Timothy Geithner unveiled yesterday and the markets had a clear response: They hated it. To find out what may be bothering the markets, we turn to Peter Morici, an economist and professor at the University of Maryland. But we are also curious how Main Street was reacting to the revamped bailout and we asked John Fetterman, the mayor of Braddock, PA to join us for his point of view.
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Timothy Geithner talks about the Financial Stability Plan at his recent press conference.
While Detroit is treading water to save its future, there's an importance piece to its ability to float: the unions. Auto workers, the backbone of the industry, are trying to walk the line between earning a living wage and earning a wage at all. They are in the tough position of having to negotiate with the automakers about salaries, benefits, and pensions against the backdrop of a flailing indusry. With the bailout deadline of March 31st looming, we turn to Peter Morici, professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission, joins us to discuss wages at U.S. car companies versus their counterparts at Japanese car factories here in America.
The Labor Department releases November unemployment data this morning. In October, the economy lost 240 thousand jobs and November may deliver some even bleaker numbers. Economist Peter Morici, a professor at the University of Maryland School of Business, looks at the numbers.