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Obama gloomy on US employment

Jul 16, 2009

Obama negative on US employment
If a ship has developed some huge holes, even the most well intentioned captain cannot save it from sinking. Something similar could be said about the US economy. Despite efforts by President Obama, as per his own admission, unemployment rate in the world's largest economy might continue to get worse before it gets better. And in some industries like the auto where thousands of jobs have been lost, they might never come back. Lost auto sector jobs, he believes, are casualties of a changing economy and it only underscores the importance of generating new businesses and industries to replace the lost ones. For this very reason, the President has set aside US$ 12 bn so that community colleges could be boosted and graduation rate could be increased. The process though may not offer immediate results. In fact, it looks unlikely that anything could stop the US unemployment rate from worsening further in the coming months. There is of course the talk of a second stimulus doing the rounds but even that will come at a huge cost to the economy. Not a good state of affairs indeed. India Inc raise most funds in Asia
There is one more area where India has managed to come out on top, in terms of mobilising maximum debt. As reported in a leading business daily, while Asian companies' fund raising through US dollar denominated debt has touched US$ 14.7 bn so far in 2009, India accounted for a majority of it. India Inc's debt was the highest in the region at US$ 3.3 bn, forming 22% of total volumes in 2009. Having said that, if one were to compare with what was mobilised in 2008, then there was a significant plunge. For instance, in 2008, India Inc had raised US$ 13.8 bn signifying a 76% fall in 2009. This is hardly surprising given the crippling effects of the global economic slowdown and the freeze in the credit markets. However, only half of 2009 is behind us and it remains to be seen whether things will look up by the end of the year.

Now, Goldman Sachs' executives in the dock
It may seem striking, but while the US government was pumping in taxpayer money to bailout Goldman Sachs, many of its top executives were busy getting their money out of the company. A report in the Financial Times shows how Goldman Sachs executives sold stock worth US$ 691 m between September 2008 and April 2009, even as it was in the process of receiving US$ 10 bn of taxpayer money. But what is also interesting to note is that these stock sales peaked between December and February, clearly a sign of fear more than anything else as Goldman Sachs' shares were trading near their record lows at the time. The company's shares have made a smart recovery from those levels thereafter, but nonetheless, it would be quite unsettling for anyone to hear that while the public's money was being put into the company, its executives were being allowed to conveniently sell their shares.


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