Financial News

[Jenksismyhero]

TARP was wildly successful, one of the few large pieces of legislation in recent memory where that can be said. How is that idiotic?

 

This isn't an argument against TARP. It's an argument about giving a bailout to a company that survived and is now profitable and not expecting that they pay ALL of that money back, even if it's slowly over time. Why should they get the double benefit - we saved them from totally collapsing, and we're giving them a break by not making them pay back 14 of the 90 something billion we gave them? That's f***ed up.

[StrangeSox]

This isn't an argument against TARP. It's an argument about giving a bailout to a company that survived and is now profitable and not expecting that they pay ALL of that money back, even if it's slowly over time. Why should they get the double benefit - we saved them from totally collapsing, and we're giving them a break by not making them pay back 14 of the 90 something billion we gave them? That's f***ed up.

 

They're selling stocks at market value. The alternative is to hold on to stocks. I would have thought you'd be happy with the divestiture.

[StrangeSox]

Also, the argument goes that the US economy got plenty of benefit by not losing another 1M jobs in late 2008/early 2009. They also placed some tight controls on executive bonuses and pay at the companies, so unlike the bank bailouts, it's not like it was used to finance billions in bonuses for the people that f***ed it all up to begin with.

[Jenksismyhero]

They're selling stocks at market value. The alternative is to hold on to stocks. I would have thought you'd be happy with the divestiture.

 

I would have been happy letting the s***ty company fail, just like the other companies that got us in this mess. I don't buy that allowing those companies to fail would have thrown us into the great depression 2. I think they would have gone through bankruptcy, fixed their issues, reorganized and continued working. Or, they would have been bought by a competitor. Either way, it would have worked out, and the US government wouldn't be out 14 billion+.

[Jenksismyhero]

Also, the argument goes that the US economy got plenty of benefit by not losing another 1M jobs in late 2008/early 2009. They also placed some tight controls on executive bonuses and pay at the companies, so unlike the bank bailouts, it's not like it was used to finance billions in bonuses for the people that f***ed it all up to begin with.

 

Yet, but it will. They have 14 billion in extra cash they didn't have at the start of this. What, you think they're going to lower the cost of the vehicles as a thank you to their customers? Even if they wait 2-3 years before bumping up their executive pay, that's absolutely what that money will go towards.

[Balta1701]

I would have been happy letting the s***ty company fail, just like the other companies that got us in this mess. I don't buy that allowing those companies to fail would have thrown us into the great depression 2. I think they would have gone through bankruptcy, fixed their issues, reorganized and continued working. Or, they would have been bought by a competitor. Either way, it would have worked out, and the US government wouldn't be out 14 billion+.

They did go into bankruptcy, get reorganized, and resume working.

[Balta1701]

Yet, but it will. They have 14 billion in extra cash they didn't have at the start of this. What, you think they're going to lower the cost of the vehicles as a thank you to their customers? Even if they wait 2-3 years before bumping up their executive pay, that's absolutely what that money will go towards.

GM Maybe, but probably not Chrysler. Europe has rules about that sort of thing.

[Jenksismyhero]

They did go into bankruptcy, get reorganized, and resume working.

 

They had the gov't push them through a focused bankruptcy. Negotiations with creditors was essentially "rigged" since GM had the federal government as their surety.

[Balta1701]

They had the gov't push them through a focused bankruptcy. Negotiations with creditors was essentially "rigged" since GM had the federal government as their surety.

Which tells you how available bridge financing was.

[Cknolls]

They did go into bankruptcy, get reorganized, and resume working.

 

 

And were given over $23 billion in tax loss carryovers, unheard of in a bankruptcy. THAT IS WHY GM IS PROFITABLE. Banks are not as profitable as they seem. Loan loss reserves, a banks best friend.

 

[mr_genius]

TARP was wildly successful, one of the few large pieces of legislation in recent memory where that can be said.

 

i disagree

Edited June 2, 2011 by mr_genius

[mr_genius]

anyways, the jobs numbers that came out today are terrible

 

 

[Jenksismyhero]

Which tells you how available bridge financing was.

 

Available? They didn't have the time to check to see what was available. It was "omg the entire country will collapse if we don't save this company" in a matter of weeks.

[southsider2k5]

Also, the argument goes that the US economy got plenty of benefit by not losing another 1M jobs in late 2008/early 2009. They also placed some tight controls on executive bonuses and pay at the companies, so unlike the bank bailouts, it's not like it was used to finance billions in bonuses for the people that f***ed it all up to begin with.

 

That three million jobs number reminds me a lot of the 100,000 lives number used before Libya.

[southsider2k5]

http://news.yahoo.com/s/ap/20110602/ap_on_...missing_workers

 

WASHINGTON – Where did all the workers go?

 

The labor force — those who have a job or are looking for one — is getting smaller, even though the economy is growing and steadily adding jobs. That trend defies the rules of a normal economic recovery.

 

Nobody is sure why it's happening. Economists think some of the missing workers have retired, have entered college or are getting by on government disability checks. Others have probably just given up looking for work.

 

"A small work force means millions of discouraged workers, lower output in the future and a weak recovery," says Rep. Kevin Brady of Texas, the ranking Republican on the Congress' Joint Economic Committee. "Those are unhealthy signs."

 

By the government's definition, if you quit looking, you're no longer counted as unemployed. And you're no longer part of the labor force.

 

Since November, the number of Americans counted as employed has grown by 765,000, to just shy of 139 million. The nation has been creating jobs every month as the economy recovers. The economy added 244,000 jobs in April.

 

But the number of Americans counted as unemployed has shrunk by much more — almost 1.3 million — during this time. That means the labor force has dropped by 529,000 workers.

 

The percentage of adults in the labor force is a figure that economists call the participation rate. It is 64.2 percent, the smallest since 1984. And that's become a mystery to economists. Normally after a recession, an improving economy lures job seekers back into the labor market. This time, many are staying on the sidelines.

 

Their decision not to seek work means the drop in unemployment from 9.8 percent in November to 9 percent in April isn't as good as it looks.

 

If the 529,000 missing workers had been out scavenging for a job without success, the unemployment rate would have been 9.3 percent in April, not the reported rate of 9 percent. And if the participation rate were as high as it was when the recession began, 66 percent, in December 2007, the unemployment rate could have been as high as 11.5 percent.

 

A majority of the 42 economists in the latest Associated Press quarterly economic survey said they expect the labor force participation rate to start growing consistently before the year ends. Twelve don't expect it to happen until next year at the earliest. Five think it never will.

 

It's certainly not happening yet. The labor force grew by just 15,000 in April from March — not even enough to keep up with population growth.

 

Economists say many would-be job seekers remain daunted by the odds against finding work: There were 4.3 unemployed people for each job opening in March, more than double the ratio before the recession. And job vacancies are running 35 percent below the pre-recession peak.

 

"I basically have stopped looking for work because there is just nothing out there," says Kim Rinde of Minneapolis, who was laid off in December 2008 from a customer service job at a company that makes cleaning equipment.

 

Longer-term trends are working to keep the participation rate down. The Congressional Budget Office expects the participation rate to fall steadily to 63 percent by 2021 as baby boomers retire.

 

The share of men 20 and older in the labor force peaked long ago, at 89 percent in 1952. It's been falling ever since and is now under 74 percent.

 

John Bound, a University of Michigan economist, suspects the long-term decline in men's participation is due partly to a drop in job opportunities for workers with few skills. Manufacturing jobs once offered good wages for workers without college degrees. But the number of factory jobs has dropped 40 percent since peaking in 1979.

 

Some who have left the job market are getting by on government checks, particularly Social Security's program for the disabled More than 8.3 million Americans were on Social Security disability last month, up 1.2 million, or 17 percent, from the end of 2007.

 

The recipients include people who lost jobs that had allowed them to work despite disabilities and who can't find new employers to accommodate them.

 

The share of women working or looking for work, after expanding from the early 1950s through the mid '90s, has plateaued at about 60 percent, where it was in April. The CBO notes that more women with high-income husbands and those with young children have been staying out of the job market.

 

Teenagers have been leaving, too. Their participation rate dropped from a peak of 59.3 percent in 1978 to a record low of 33.5 percent in February. (It ticked up to 33.7 percent in April.) More young people are choosing college or vocational school over work. One reason is that fewer good-paying jobs are available to teenagers right out of high school.

 

"There was no way I was going straight to work" after high school, says Zachary Simmons, 19, who's studying computers at Surry Community College in North Carolina. "I have to get a degree. That's what gets you in the door for an interview."

[Balta1701]

Groupon files for $750 million IPO.

[Steve9347]

Groupon files for $750 million IPO.

Andrew Mason should have taken the $6 billion he was offered from Google and run. He will rue that day.

[southsider2k5]

Andrew Mason should have taken the $6 billion he was offered from Google and run. He will rue that day.

 

This is why

 

LinkedIn's IPO may offer some context for Groupon's valuation. To put matters in perspective, LinkedIn's offering price was $175 million and the company's IPO valued it at over $9 billion. Groupon's offering price is $750 million and the New York Times previously reported that the company had been valued at close to $25 billion.

[StrangeSox]

10-year real wage gains worse than during Depression

 

[kapkomet]

Stimulus worked, greatest president in history.

 

[Balta1701]

Stimulus worked, greatest president in history.

The 2001 and 2003 tax cuts worked, greatest president in history.

 

(a fair critique of the stimulus would look at wage growth by 2020 or so. The direct comparison of decade by decade performance is the decade starting in 2001 with high income tax cuts. Which you have repeatedly told me is a great thing for economies.)

[Balta1701]

54,000 total jobs

-28,000 jobs in the public sector

9.1%.

 

Maybe someone should do something.

[Balta1701]

This post has clearly nothing to do with the post before it.

Today, and not a moment too soon, the non-profit Citizens For Tax Justice (CTJ) has put out their findings revealing that twelve of the nations largest Fortune 500 companies, while making $170 billion in profits during the period of The Great Recession, paid an effective tax rate of negative 1.5%.

 

Yes, you read that correctly.

 

Not only have these twelve companies paid zero in taxes for the years 2008-2010, they actually received tax subsidies that added $62.4 billion to their bottom lines.

 

The companies were chosen by the CTJ to represent a range of industries, including manufacturing, energy, services, transportation and high tech and include – in alphabetical order – American Electric Power, Boeing, Dupont, Exxon Mobil, FedEx, General Electric, Honeywell International, IBM, United Technologies, Verizon Communications, Wells Fargo and Yahoo.

 

Here are the bullet points presented by the report:

 

* From 2008 through 2010, these 12 companies reported $171 billion in pretax U.S. profits. But as a group, their federal income taxes were negative: –$2.5 billion.

 

* All but two of the dozen companies enjoyed at least one no-tax year over the 2008-10 period, despite reporting substantial pretax U.S. profits in those no-tax years.

 

* Eight of the twelve companies reported net tax benefits over the full three-year period.

 

According to the study, not a single one of these companies paid an amount even close to the 35% statutory tax rate.

 

In fact, the tax rate paid by Exxon Mobile, when spread over the full three years, was only 14.2% – a full 60% below the 35% rate that corporations are supposed to be paying. And if we take a look at what Exxon paid over just the past two years, it totals a mere 0.4% on their pre-tax profits of $9.9 billion.

 

And get this – Exxon Mobile paid the most in taxes of any of the twelve companies on the list.

[StrangeSox]

More proof of how the US has the toughest corporate tax structure in the world!

[Balta1701]

More proof of how the US has the toughest corporate tax structure in the world!

And how a lenient corporate tax structure is great for job creation.