Switch to Desktop Site
 
 

Job losses' ramifications far-reaching

Next Previous

Page 2 of 4

About these ads

"The increase in disappointed workers, the most since 2003, is consistent with across-the-board reluctance to hire," says Andrew Stettner, an analyst at the National Employment Law Project in New York.

Problems in the job market come against a backdrop of yet more turmoil in the credit markets. Banks are asking hedge funds to meet margin calls as the hedge funds' financial assets fall in value.

In addition, the stock and bond markets reacted badly to an announcement last week by Ambac Financial Group, an insurer of financial assets, that it would try to raise $1.5 billion by issuing new stock. Ambac is trying to maintain its AAA credit rating.

On Friday morning, in an attempt to shore up the credit markets, the Fed announced that it would expand a special funding facility for banks. This would make it easier for them to borrow money.

"The whole point of the funding is they need to get some normalcy to return to the banking system," says Bob Brusca, an economist with Fact & Opinion Economics in New York.

Many in the credit markets are convinced that the Fed will drop interest rates sharply when it meets March 18.

"I expect a half-a-point drop, but the bond market is already pricing in a three-quarter-of-a-point drop," says Richard DeKaser, Washington-based chief economist at National City Corp., a Cleveland bank. "There is even a small possibility of a full percentage-point drop."

Next Previous

Page 2 of 4


Follow Stories Like This
Get the Monitor stories you care about delivered to your inbox.

Share

Loading...