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More gloomy economic data has investors crying for Ben Bernanke & Co. to slash rates sooner than later. But should the Fed listen?
By Paul R. La Monica, CNNMoney.com editor at large
January 15 2008: 12:41 PM EST
NEW YORK (CNNMoney.com) -- A nearly $10 billion loss from Citigroup. Weak retail sales last month. Rising inflation pressures. It's ugly out there.
With all that in mind, investors are now betting the Federal Reserve may cut interest rates before its next scheduled meeting, a two-day session that wraps up on Jan. 30.
Some economists have argued that the United States is close to a recession or may already be in one.
"Fundamentally, we're on the verge of a recession. The economy may pull back from the cliff but I wouldn't count on it," said David Wyss, chief economist with Standard & Poor's.
BofA to gut investment unit: Report
CEO Ken Lewis lays out plans to restructure the bank's business banking division, according to The Wall Street Journal.
January 15 2008: 3:40 PM EST
NEW YORK (CNNMoney.com) -- Bank of America will drastically reorganize its corporate investment division as it retreats to focus on its core competencies of big business banking, said CEO Ken Lewis in an interview with The Wall Street Journal.
After laying off about 650 people, on top of the 500 layoffs announced in October, the bank's corporate and investment unit will be shrunk by about 12 percent both in terms of employees and scope, reported the Journal. Bank of America will also sell off its hedge fund lending division, and shut down parts of its trading and debt-based operations.
Citigroup's $10 billion loss is worst ever
Writedown: $18.1 billion. Dividend cut: 41%. Job cuts: In the works. Chief Executive Vikram Pandit says financial giant's performance was 'unacceptable.'
"All the dismal data cement a half-point cut. But things have gotten so bad that just a 50 basis point cut would trigger a disappointing reaction,"
Bad bank earnings: Prepare for the flood
Citi and Merrill are expected to take giant writedowns - and it doesn't look like the worst is over just yet on Wall Street.
By David Ellis, CNNMoney.com staff writer
January 14 2008: 11:58 AM EST
NEW YORK (CNNMoney.com) -- Sometimes when it rains, it pours on Wall Street. And this week forecasters are calling for a flood.
Starting Tuesday, Wall Street will most likely find itself drowning in a torrent of dreary earnings news from some of the nation's biggest banks, marking yet another grim milestone for the troubled financial sector.
"It's not going to be a pretty sight," said Frank Barkocy, director of research at the investment advisory firm Mendon Capital Advisors in New York, which owns shares of a number of large banks including Bank of America and Washington Mutual.
Of the five banks and brokers scheduled to report results this week, three are expected to post a fourth-quarter loss - Merrill Lynch (MER, Fortune 500), Citigroup (C, Fortune 500) and Washington Mutual (WM, Fortune 500). JPMorgan Chase (JPM, Fortune 500) and Wells Fargo (WFC, Fortune 500) are expected to report a decline in quarterly earnings.
The agriculture commodity prices. Last week stuff was going limit up, Canola going up 24 bucks a day.
.....Looks like someone is manipulating the market for a quick gain on the up stroke and a slam dunk on the down.
Originally posted by dingleberry77
What's the time frame on everything going tits up. There are some very nervous rumblings here in Australia. Our rates are going up and up. Our new treasurer is virtually begging our Federal Reserve to stop raising rates. Everyone i know in Australia is on a very fine tight rope.
New Federal Reserve Chairman Ben Bernanke said in a speech in 2003: "The US government has a technology called a printing press (or, today, its electronic equivalent), that allows it to produce as many US dollars as it wishes at essentially no cost."
U.S. consumer prices soared at their fastest rate in almost two decades last year as higher energy, food and medical bills took a toll on consumers, suggesting that the economy faces a stagflationary mix of slower economic growth and rising price pressures.
Still, the inflation data aren't alarming enough to prevent the Federal Reserve from carrying out a fourth-straight interest rate reduction later this month amid signs that the housing slump has spread to the broader economy.
Wells Fargo Inc., one of the nation's largest banks, said Wednesday fourth-quarter earnings fell 38 percent, hurt by a charge to cover fallout from the subprime loan crisis.
US retail sales fell in December as shops endured weak Christmas trading, the latest indication that the US economy is under pressure.
Labor Department says soaring energy costs, from gasoline to home heating oil, responsible for 6.3% increase last year
U.S. automakers struggle with weak sales, ongoing losses as Detroit auto show kicks off, but lower labor costs, overseas growth could help in future.