Friday, August 7, 2009

Unemployment, AIG, FNMA

  • Nonfarm payrolls fell by 247,000 and the jobless rate dropped to 9.4% from 9.5%. This report was slightly better than expected, yet the economy is still shedding jobs. This month's jobs losses bring the total number of jobs lost since the recession began to 6.7 million.
  • Egads! AIG reported a profit, the first one in seven quarters as investment losses narrowed. The insurance company, now 80% owned by the US government, posted net income of $1.82 billion, or $2.30 a share. So if you were looking for an explanation as to why the stock ripped this week, here it is: Somebody leaked the crop report.
  • To help offset AIG's tidy profit, Fannie Mae, also 80% owned by the government, reported a $15 billion loss and put in its request for another $10.6 billion from Uncle Sam to cover the resulting net worth deficit. The mortgage giant had a few sobering comments in its press release: "We are experiencing increases in delinquency and default rates for our entire guaranty book of business, including on loans with fewer risk layers...Total nonperforming loans in our guaranty book of business were $171.0 billion on June 30,2009 compared with $144.9 billion on March 31.2009."

1 comment:

Mr Wrightwood said...

OK, I was wrong. Yesterday, what I meant was: "the payroll number will be exciting, and I will go buy equities as soon as my belief is confirmed."