The Wall Street Journal and the New York Times are in lockstep on their headlines for respective stories on the ever-worsening U.S. economy. The WSJ's leading headline reads, "Economy Dives as Goods Pile Up," while the NYT goes with "Steep Slide in U.S. Economy as Unsold Goods Pile Up." Both papers chronicle the economy's sickly state, reporting that gross domestic product fell 3.8 percent in the fourth quarter, the largest decline since 1982. It was, however, less than the 5 percent to 6 percent that economists had forecast and "well below" the 1958 record of 10.4 percent, the Journal says.
The less-than-expected contraction was due to consumption, which "collapsed so quickly that goods piled up in inventory, unsold but counted as part of the nation's output," according to the Times. As a result, businesses will likely curb their inventory spending, leading economists to believe that the first few months of this year will "bear the brunt of the recession."
Following the report, President Barack Obama said Friday that the data were not "just an economic concept" but a "continuing disaster for America's working families." He used it to emphasize the urgency of his $819 billion stimulus package, which is now being debated in the Senate after having passed through the House on Wednesday.
The news also sent stocks tumbling, leading to a rather downbeat denouement for the first month of the year. The WSJ reports it was the worst January on record in the Dow Jones Industrial average's 113-year lifespan and the fifth consecutive month of declines. The Dow finished at 8,000.86, an 8.84 percent drop for the month and a 31 percent drop over the past five months, marking the steepest decline since the five months ended December 1937. According to the Journal, the results could be a harbinger. "Historically, stocks' performance in January often foretold performance for the year. For the Dow, January has accurately predicted the year's direction 75% of the time. In the past 30 years, it has been right 26 times," the paper says.
Bloomberg reports that Bank of America will dole out 2008 bonuses of $50,000 or so over the course of three years for its capital markets and investment banking divisions. Citing an anonymous source, the site writes that a portion of each bonus, "perhaps less than 10 percent," will be paid in quarterly installments this year. The bank will pay interest on the remainder at LIBOR, which yesterday was 1.18 percent for three-month dollar loans. The news source has headhunter Jeanne Branthover saying that the approach was "historic." "Employers can get away with anything right now because people are just happy to be employed," she said.
The article complements the WSJ's lead Money & Investing story on executive pay, which says that some officials on Wall Street think that compensation could get curtailed more in coming months due to legislation. On Friday, Sen. Claire McCaskill introduced a bill that would limit the salary, bonuses, and stock options of executives at firms getting federal bailout money to no more than $400,000 a year, not counting benefits. Why that much? It's what President Obama makes. Showing it's sometimes latent sense of humor, the WSJ writes, "In 2007, Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein earned that much in about two days."
In a graphic, the paper reveals that John Mack, CEO for Morgan Stanley, got $40 million in stock and options in 2006; Lloyd Blankfein, CEO for Goldman Sachs Group pocketed $54 million for 2006 and $69 million for 2007; and Robert Rubin, director and former senior counselor for Citigroup, received $115 million since 1999.
The less-than-expected contraction was due to consumption, which "collapsed so quickly that goods piled up in inventory, unsold but counted as part of the nation's output," according to the Times. As a result, businesses will likely curb their inventory spending, leading economists to believe that the first few months of this year will "bear the brunt of the recession."
Following the report, President Barack Obama said Friday that the data were not "just an economic concept" but a "continuing disaster for America's working families." He used it to emphasize the urgency of his $819 billion stimulus package, which is now being debated in the Senate after having passed through the House on Wednesday.
The news also sent stocks tumbling, leading to a rather downbeat denouement for the first month of the year. The WSJ reports it was the worst January on record in the Dow Jones Industrial average's 113-year lifespan and the fifth consecutive month of declines. The Dow finished at 8,000.86, an 8.84 percent drop for the month and a 31 percent drop over the past five months, marking the steepest decline since the five months ended December 1937. According to the Journal, the results could be a harbinger. "Historically, stocks' performance in January often foretold performance for the year. For the Dow, January has accurately predicted the year's direction 75% of the time. In the past 30 years, it has been right 26 times," the paper says.
Bloomberg reports that Bank of America will dole out 2008 bonuses of $50,000 or so over the course of three years for its capital markets and investment banking divisions. Citing an anonymous source, the site writes that a portion of each bonus, "perhaps less than 10 percent," will be paid in quarterly installments this year. The bank will pay interest on the remainder at LIBOR, which yesterday was 1.18 percent for three-month dollar loans. The news source has headhunter Jeanne Branthover saying that the approach was "historic." "Employers can get away with anything right now because people are just happy to be employed," she said.
The article complements the WSJ's lead Money & Investing story on executive pay, which says that some officials on Wall Street think that compensation could get curtailed more in coming months due to legislation. On Friday, Sen. Claire McCaskill introduced a bill that would limit the salary, bonuses, and stock options of executives at firms getting federal bailout money to no more than $400,000 a year, not counting benefits. Why that much? It's what President Obama makes. Showing it's sometimes latent sense of humor, the WSJ writes, "In 2007, Goldman Sachs Group Inc. Chief Executive Lloyd Blankfein earned that much in about two days."
In a graphic, the paper reveals that John Mack, CEO for Morgan Stanley, got $40 million in stock and options in 2006; Lloyd Blankfein, CEO for Goldman Sachs Group pocketed $54 million for 2006 and $69 million for 2007; and Robert Rubin, director and former senior counselor for Citigroup, received $115 million since 1999.
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