Latest forex analysis - page 36
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jpy
The jpy is now pretty bearish
no change in the interest rate, maybe trade balance will change the game 2morrow. for now keep to this long term trend
look at: eur/jpy and gbp/jpy (600pips rise!)
Wall Street fat cats fear the pay czar
Kenneth Feinberg will soon rule on pay plans for top employees at seven big bailout recipients. It looks like they may be in for a rude awakening.
NEW YORK (CNNMoney.com) -- President Obama's "pay czar" will soon decide whether top executives at firms that received the most assistance from the government during last year's financial crisis are making too much money.
By month's end, Kenneth Feinberg, a Washington attorney who up until six months ago was known by few on Wall Street, is expected to rule on pay packages for the 5 most senior executives at Citigroup (C, Fortune 500), Bank of America (BAC, Fortune 500) and AIG (AIG, Fortune 500) as well as 20 other highly compensated executives at those firms.
Feinberg is also expected to weigh in on plans for senior executives at Chrysler, Chrysler Financial, General Motors and GMAC, the former financing arm of GM, before moving onto the next 75 highest paid employees at those seven companies.
Here's a glimpse of what we can expect:
Who is in his cross hairs?
When the Obama administration first unveiled plans to review compensation packages in June, the aim was to curb runaway pay practices at the seven firms that took the most in bailout funds.
Hoping that some oversight might push these companies to return taxpayer money sooner rather than later, the Treasury Department gave Feinberg authority on compensation packages on the 100 highest paid employees at each of these seven firms.
There are already signs that those 700 individuals may be in for a rude awakening.
Last week, outgoing Bank of America CEO Ken Lewis said he would not accept a salary or bonus for 2009. The bank said the decision came after Feinberg "suggested" it to Lewis, and followed an uproar over indications that Lewis is poised to walk away with a minimum of $53 million in pension benefits after he retires.
Feinberg has also recommended that AIG withhold some of the $198 million in retention payments owed to workers in the company's Financial Products division, the unit that led to the company's near collapse.
Few details are expected to emerge from Feinberg's initial ruling though. Treasury officials have indicated they won't disclose names of the employees that are being reviewed -- or the specifics of their payment plans -- without an individual's approval.
However, it seems likely that most of the 700 employees will face some major changes to how they are paid.
Instead of large salaries and cash bonuses, many of the executives may wind up with more deferred forms of compensation, such as restricted stock that vests over a number of years.
To that end, Feinberg signed off on a $10.5 million pay package for new AIG chief executive officer Robert Benmosche this month that included $4 million in stock options that he will not be able to sell until August 2014.
But in some instances, there may be little excessive pay for Feinberg to cut.
AIG has already revised pay packages out of fear of how both Washington and American taxpayers might react. In June, the company said it would limit salary increases both for its top seven executives and the next tier of senior management.
And some high-profile CEOs have also taken it upon themselves to act before the government did. Citigroup chief Vikram Pandit, for example, declared earlier this year that he would accept pay of just $1 a year and no bonus until his firm returned to profitability.
Just a year ago, Pandit took home $10.8 million in salary stock and options.
How aggressively can he act?
There are also clear limits to Feinberg's authority. Under powers granted to him by the Treasury Department, he cannot set pay levels for employees at bailout firms. Rather, he simply has the power to review and either approve, or reject, an employee's compensation package.
What's more, employees making less than $500,000 in total annual compensation will not face any scrutiny.
Market updates
EurUsd Consolidation between 1.4840 and 1.4967 continues
GbpUsd 1.6320 support level - test 1.6468 resistance
UsdJpy short at 90.60 - long at 89.70
The long term trend is definitely long, but yesterday the usd came back on itself after us stocks decreased the economy showing more signs of weskness-it benefits the currency-nearly 100 pips!
Jobless claims dent recovery hopes
Initial claims jump 11,000 to 531,000, much more than expected. Filings had fallen five of the past six weeks.
NEW YORK (CNNMoney.com) -- The number of first-time filers for unemployment insurance rose last week, snapping two weeks of significant declines, according to a government report issued Thursday.
There were 531,000 initial jobless claims filed in the week ended Oct. 17, up 11,000 from an upwardly revised 520,000 the previous week, the Labor Department said in a weekly report. The week included the Columbus Day holiday.
A consensus estimate of economists surveyed by Briefing.com expected 515,000 new claims.
"[The initial claims figure] is somewhat surprising," wrote Jim Baird analyst at Plante Moran Financial Advisors, in a research note. "Excess slack in the system and employers' hesitance to ramp up hiring appear likely to weigh on the labor markets for some time."
The 4-week moving average of initial claims was 532,250, down 750 from the previous week's revised average of 533,000.
New jobless claims had declined for five of the last six weeks, falling sharply in the first two weeks of October. Earlier this month, initial claims fell to their lowest level since January.
Continuing claims: The government said 5,923,000 people filed continuing claims in the week ended Oct. 10, the most recent data available. That was down 98,000 from the preceding week's ongoing claims, and would -- if not revised -- mark the first time since late March that continuing claims were below 6 million.
The 4-week moving average for ongoing claims fell by 59,250 to 6,030,750, from the prior week's revised average of 6,090,000.
But the slide in continuing claims may signal that more filers are falling off those rolls and into extended benefits.
Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, nor people who have exhausted their benefits.
Unemployment benefits. As more and more unemployed Americans find themselves with expired benefits, Congress is wrestling with legislation that would extend their lifeline. The House has approved a jobless benefits extension, but the Senate has not yet voted on it.
Earlier this month, Senate Democrats introduced a bill that would extend unemployment benefits by up to 14 weeks in every state. Those living in states with unemployment levels greater than 8.5% would receive a further six weeks.
Currently, states with rates above 8% now offer up to 79 weeks of benefits. States with rates between 6% and 8% now offer up to 59 weeks, and all other states currently offer up to 46 weeks.
State-by-state data: Only one state reported a decline in initial claims of more than 1,000 for the week ended Oct. 10, the most recent data available. Claims in California fell by 7,062, which a state-supplied comment attributed to fewer layoffs in the construction, trade, service and manufacturing sectors.
Eighteen states said that claims increased by more than 1,000. Florida reported the most new claims at 9,976; New York's jumped by 5,411; Wisconsin saw a rise of 4,999; Indiana's increased by 4,977; and Maryland's rose by 2,783.
Outlook: Although experts expect the U.S. economy grew in the third quarter, Plante Moran analyst Baird said Thursday's report leaves him concerned about future jobless figures.
"Despite the relatively steady improvement in weekly claims since April, this also suggests that the employment market remains weak," Baird said.
As "stimulative programs" like Cash for Clunkers and the $8,000 first-time home buyer tax credit wind down, Baird said, the labor market could face even further pressure in the months ahead.
"We remain cautious about the outlook moving forward when ... [these programs] are no longer factors," Baird said.