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Heh...better fill up yer gas tanks...
FedEx confirms 1,000 layoffs
FedEx Corp. has confirmed that the company has cut 1,000 jobs worldwide, including 500 in its headquarters city of Memphis, Tenn. The cuts include some at its plant in Winston-Salem, although the company would not say how many. Dell also cut an unknown number of jobs at the Winston-Salem plant in March
Company spokesman Jesse Bunn said the employees were “salaried exempt” professionals and managers. The laid off workers will be given severance packages, advance notice of job openings and career counseling.
“The decision was very difficult,” Bunn said. “As we said in March and in December, the global economic conditions are bad and continue to get worse. Actions like this are unavoidable.”
In mid-March, FedEx announced it planned to cut more jobs, reduce some workers’ hours and cut back on truck and jet capacity. That came after the company said its third quarter profits fell 75 percent to $97 million, or 31 cents per share.
In February, FedEx cut 900 positions at its FedEx Freight subsidiary citing continued decline in consumer spending and unprecedented pressures on the trucking industry.
Those cuts came just a month after FedEx announced in January that the shipping giant would slash its 2009 marketing budget by 25 percent.
FedEx officials had hoped to avoid layoffs and other cuts by trimming salaries.
FedEx CEO Fred Smith said in a statement in December that he would cut his own salary by 20 percent and other senior executives would take a 7.5-10 percent salary cut. U.S. salaried employees received a 5 percent cut.
Those cuts did not include hourly employees, such as package handlers, mechanics and pilots.
“We try and protect as many jobs as possible and strengthen the company so that we are prepared when the economy will rebound,” Bunn said. “In December, we announced a series of cost reductions and clearly those needed to be supplemented.”
FedEx (NYSE: FDX) said these cuts will help the company save $1 billion, along with job cuts across its FedEx Freight and FedEx Office divisions, a reduction of some workers' hours, elimination of certain bonuses and implementation of a hiring freeze.
Pimco says stock rally vulnerable given data
NEW YORK (Reuters) - U.S. credit markets are not showing the same optimism on the economy as U.S. equities, suggesting that the recession will run far longer than most expect, Mohamed El-Erian, the chief executive of bond giant Pacific Investment Management Co., said on Friday.
"For the recent equity rally to continue, markets need a significant and sustained improvement in fundamentals that is unlikely to materialize given current data," El-Erian said in an interview.
Friday's release on the latest employment figures underscores his point, he said. U.S. employers slashed 663,000 jobs in March, lifting the unemployment rate to 8.5 percent, the highest since 1983.
"Unfortunately, the already worrisome employment picture continues to deteriorate," El-Erian said. "While the numbers are in line with Wall Street's expectation, persistently high monthly job losses and the accelerating rise in the unemployment rate will further dampen Main Street's consumption and animal spirits in an economy already facing considerable headwinds due to massive wealth destruction."
Obama Bank Policy Signals $1 Trillion in Writedowns (Update1)
April 3 (Bloomberg) -- U.S. regulators may force Bank of America Corp., Citigroup Inc. and at least a dozen of the nation’s biggest financial institutions to write down as much as $1 trillion in loans, twice what they’ve already recorded, based on Federal Deposit Insurance Corp. auction data compiled by Bloomberg.
Banks failing Federal Reserve evaluations of loans this month may be ordered to make sales worth as little as 32 cents on the dollar, according to FDIC data. That would be less than half of the 84 cents on the dollar the Treasury Department suggested was a possible purchase price. Some of the bank- insurance agency’s auctions brought 0.02 cent on the dollar.
Lower valuations would lead to new writedowns and capital injections from the $134.5 billion remaining in the Troubled Asset Relief Program, Nobel Prize-winning economist Joseph Stiglitz said.
“The only way banks will sell is under duress,” the 66- year-old professor at Columbia University in New York said in a phone interview.
Asset sales are the latest step in President Barack Obama’s effort to restart the U.S. economy through the most costly rescue of the financial system in history. Treasury Secretary Timothy Geithner’s Legacy Loan Program and Legacy Securities Program together are targeted to start at $500 billion and may expand to $1 trillion.
FHA program strained by record loan defaults
Bloomberg News / April 3, 2009
WASHINGTON - Federal Housing Administration mortgage-insurance programs are at risk as record home-loan defaults erode the government agency's reserves, the inspector general of the Housing and Urban Development Department said.
The agency has never been under more strain, as other sources for lenders to finance and insure mortgages have dried up and as policy makers create new FHA programs for riskier borrowers, Kenneth Donohue told a Senate Budget Committee panel on housing yesterday.
The FHA may not have the systems and infrastructure to "adequately perform" its duties, or take on new functions imposed by Congress, including insuring jumbo loans of as much as $729,750, Donohue said. The FHA accounted for about 70 percent of the market in the first quarter of this year, up from 21 percent a year earlier, according to Donohue.
"If Congress and the administration place more risk on FHA before the problems are solved, this powder keg could explode and taxpayers will be on the hook," said Senator Christopher "Kit" Bond, a Missouri Republican.
A record US mortgage default rate - now at 7.88 percent in Mortgage Bankers Association data - has eroded FHA's mortgage insurance fund, which has fallen by almost half to $12.9 billion from $21 billion, Donohue said. The loan insurance ratio, which measures the amount of reserves to the amount of loans insured, dropped to 3 percent from 6.4 percent a year ago. FHA is required to maintain a ratio of at least 2 percent.
"If more pessimistic assumptions are factored in, the ratio could dip below 2 percent in succeeding years, requiring an increase in premiums or congressional appropriation intervention to make up the shortfall," Donohue said.
To deal with the added demand, FHA has relaxed mortgage-broker licensing requirements, which Donohue says exposes the system to potential fraud. FHA approved 3,300 lenders in fiscal 2008 from 692 in 2006, Donohue said.
Originally posted by irishchic
Not many posts today my dears!
I still don't get the "green"today and guess many have asscess to those rose-colored glasses I lost.