New Round Of Rescue Funds DisbursedThe government said yesterday it has supplied $33.56 billion to 21 banks in a second round of payments from the $700 billion rescue program.
The Treasury Department confirmed the second round of government stock purchases designed to bolster the balance sheets of the nation's banks to combat the worst financial crisis in more than seven decades.
The new payments follow an initial $125 billion designated for nine of the country's biggest banks. The rescue program has now disbursed $158.56 billion with officials working to get more payments out to banks in coming weeks.
The news comes as congressional officials said the Bush administration has informed top lawmakers it does not intend to use at least half the $700 billion bailout fund that Congress approved this fall to aid the financial industry.
The officials said administration officials passed the word over the weekend that they intend to leave $350 billion untouched when they leave office on Jan. 20. That would mean the incoming Obama administration would decide whether and how the funds should be spent.
Economists Say Next Year's Outlook Worse
Meanwhile, a survey of the nation's top business economists finds a worsening outlook through next year.
Downgrading the forecast amid the growing financial crisis, the National Association for Business Economics survey looked for gross domestic product to fall 2.6 percent in the final quarter of this year.
The group's panel of 50 economists saw growth of just 0.7 percent in 2009. Some 96 percent of the panelists said they believe that a recession has begun. The economists expect the jobless rate to rise to 7.5 percent by the end of next year. They look for home sales and housing starts to hit bottom by the middle part of next year.
Japan In Recession; U.S. Next?
Japan announced Sunday that its economy contracted in the third quarter, the second consecutive quarter of decline, officially putting the world's No. 2 economy in a recession.
Japan's gross domestic product fell at an annual pace of 0.4 percent in the July-September period, following a 3.0 percent decline in the April-June period.
Data released Monday showed Japanese companies sharply cut back on spending amid the global slowdown. The fall of Japan's economy raises some sobering questions about the health of the U.S. and the global economy.
Japan joins Italy, Germany and rest of the 15 countries that use the euro officially in a recession, the European Union said Friday, as their economies shrank for a second straight quarter because of the world financial crisis and sinking demand.
EU statistics published Friday show the euro zone shrank by 0.2 percent in both the third and second quarters compared to the quarter before. Two successive quarters of negative growth is the usual definition of a recession.
Banking giant Citigroup will slash 53,000 jobs and cut expenses by 20 percent in the coming months, company CEO Vikram Pandit told employees in a global town hall meeting Monday.
The 53,000 job cuts are in addition to the 22,000 already being eliminated from Citigroup Inc.'s 375,000-member work force as of the end of 2007. Citigroup, the nation's second largest bank by assets behind JPMorgan Chase, has been one of the hardest hit financial institutions during the credit crisis.
Over the past four quarters, the company has lost more than $20 billion, due in large part to its ill-timed bets on the U.S. housing market.
A company spokesman said Monday that about half of the expected work force reductions will come from business sales. Citigroup already announced that it was selling Citi Global Services and its German retail banking business, accounting for about 18,000 jobs. Citi is planning to sell other businesses, too, but has not announced them yet.
The other half of the work force reductions will come from layoffs and attrition, the spokesman said.
All Eyes On Big 3 Bailout Proposal
Senate Democrats are proposing to deny bonuses to U.S. auto executives making more than $250,000 a year in exchange for giving the firms and their suppliers $25 billion in loans from the $700 billion Wall Street bailout.
The companies would first have to give the government a plan for "long-term financial viability," according to a copy of the legislation according to FOX News and the Associated Press The Associated Press. The loans -- which would start at a 5 percent interest rate -- would come from the second half of the financial industry rescue money. The measure also would extend jobless aid to unemployed workers whose benefits have run out.
After a turbulent week that sent the Dow Jones industrials down nearly 340 points, investors found little solace in all the latest news. Stocks zigzagged throughout the Monday session, finally giving way to a stream of late-day selling that left the Dow Jones industrials lower by 223 points.
MICHELLE
FOX News, Associated Press
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