Financial Market Update-Where Have All the Jobs Gone?
- Nov 13, 2008
Shaking off more bad news on the employment front, markets surged today with a late rally. Perhaps driven by bargain seekers, the Dow Jones index spiked up 552 points, or 6.67 percent today. The S&P 500 gained 6.92 percent, while the Nasdaq was up 6.5 percent.The economic implosion from has driven new U.S. unemployment insurance claims to their highest level since September 2001, according to the U.S. Department of Labor. In the week ended Nov. 8, jobless claims were up 32,000 to 516,000. The total number of workers currently accepting unemployment benefits is now the most since 1983. More than 270,000 households received a foreclosure filing in October, according to RealtyTrac Inc., meaning there was either a default notice, or a warning of an impending auction, or an actual foreclosure. The total was up 25 percent from last October, which is less than the average monthly increases this year of 50 percent. That slowdown in the increase in foreclosures probably reflects state and corporate efforts to stem the foreclosure tide, but it isn’t exactly an optimistic trend. “The apparent slowing of foreclosure activity understates the severity of the foreclosure problem,” RealtyTrac CEO James Saccacio said in a statement. “The net effect may be merely delaying inevitable foreclosures.” In October, one in every 452 households in the United States received a foreclosure filing, according to RealtyTrac. California had the most filings at 56,954, down from more than 100,000 in August, but neighboring Nevada is still foreclosure king in terms of having the highest rate: one in every 74 residential units. Arizona was second and Florida third in foreclosure rates. Here’s the bailout scorecard so far: The nation’s nine largest banks will be getting about $125 billion, the better to feast on smaller rivals; regional banks will also be getting $125 billion (are there even smaller banks to swallow?); and $40 billion is going to expand the bailout of “we’re not downsizing our corporate functions” insurer AIG. That’s $290 billion all together. Amid all the bad news, Congress–in the form of the House Committee on Oversight and Government Reform–got to question hedge fund managers today, including famed investor George Soros, about their industry’s role in the nation’s financial FUBAR. Soros was not optimistic: “Hedge funds were an integral part of the bubble.” he said. “But the bubble has now burst and… I would guess that the amount of money they manage will shrink by between 50 and 75 percent.”