A report on Wednesday showed private sector job losses of 693,000 in December, far greater than economists had expected. Small businesses accounted for an unusually large 40 percent of the decline, according to the figures from ADP Employer Services and Macroeconomic Advisers. ( http://www.adpemploymentreport.com/pdf/FINAL_Report_December_08.pdf )

read the rest of the article;Job cuts soar as small firms fight to survive...

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Fed predicts economy will get worse

In the minutes from its last meeting, the central bank said it expects GDP to decline in 2009 and unemployment to rise into 2010.

By Chris Isidore, CNNMoney.com senior writer

Last Updated: January 6, 2009: 7:12 PM ET

read the rest of the article; Fed expects economy to worsen

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Billionaire Merckle commits suicide

By James Wilson in Frankfurt and Andrew Jack in London

Published: January 6 2009 15:26 | Last updated: January 6 2009 19:10

Adolf Merckle, one of Germany’s wealthiest men, committed suicide after weeks of talks with creditors designed to save his businesses from being consumed by disastrous investments and the global financial crisis.

read the rest of the article; http://www.ft.com/cms/s/0/f9557fac-dc05-11dd-b07e-000077b07658.html

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Manufacturing index drops to 28-year low

NEW YORK – Manufacturing activity fell more than expected in December, hitting the lowest reading in 28 years as new orders and employment continue to decline.

The Institute for Supply Management, a trade group of purchasing executives, said Friday its manufacturing index fell to 32.4 in December from 36.2 in November. Wall Street economists surveyed by Thomson Reuters had expected the reading to fall to 35.5.

Component readings of the index hit historic lows. New orders fell to their lowest level on records going back to 1948. Prices fell as the number of respondents saying they had paid more in December than in November sank to its lowest monthly reading since 1949.

read the rest of the article; http://news.yahoo.com/s/ap/20090102/ap_on_bi_ge/economy

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Euro-zone manufacturing contracts at record pace
Friday January 2, 5:08 am ET

Euro-zone manufacturing sector contracted at record pace in December

LONDON (AP) -- Manufacturing activity contracted for the seventh month running in December for the countries using the euro, falling at its sharpest rate for at least 11 years, a closely-watched survey found Friday. The figures reinforced expectations that the European Central Bank will cut interest rates again this month.

read the rest of the article; http://biz.yahoo.com/ap/090102/eu_economy.html

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Financial Times; US stocks suffer worst year since Great Depression

By Alistair Gray in New York

Published: December 31 2008 14:09 | Last updated: December 31 2008 22:08

The worst annual performance for Wall Street stocks since the Great Depression ended with a modest rally on the final day of trading as the Federal Reserve pushed ahead with its plan to buy mortgage-backed securities.

The central bank’s plan to buy up to $500bn of mortgage bonds by the middle of 2009 helped spur a 1.4 per cent gain on the day for the S&P, which finished 2008 at 903.25.

The Dow Jones Industrial Average and Nasdaq Composite Index added 1.3 per cent to 8,776.39 and 1.7 per cent to 1,577.03, respectively. Volumes were thin as many traders remained away from their desks ahead of the New Year holiday.

For the year, the S&P 500 dropped 38.5 per cent, marking its worst run since a marginally higher drop of 38.6 per cent in 1937. The Dow lost 33.8 per cent, its worst annual decline since the index fell 52.7 per cent in 1931.

read the rest of the article; http://www.ft.com/cms/s/0/bd25ac02-d73a-11dd-8c5c-000077b07658.html

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Massive rescue efforts by the US government and central bank in recent months helped avert a "financial collapse" and are working to stabilize the economy, a Treasury report said Wednesday.

The Treasury report to a congressional panel overseeing the 700-billion-dollar rescue plan passed in early October said the extraordinary actions probably averted deeper problems.

"Treasury, working with the Federal Reserve, the FDIC (Federal Deposit Insurance Corp.) and other regulators, has taken the necessary steps to prevent a financial collapse," the report said.

"The most important evidence that our strategy is working is that Treasury's actions, in combination with other actions, stemmed a series of financial institution failures. The financial system is fundamentally more stable than it was when Congress passed the legislation."

read the rest of the article; http://www.breitbart.com/article.php?id=081231191928.ktj6xb04&show_article=1

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December 15, 2008
HP-1328

U.S. Government Releases FY 2008 Financial Report

Washington - The Treasury Department and the Office of Management and Budget today released the Fiscal Year 2008 Financial Report of the United States Government. The report details the U.S. government's current financial position, as well as its short-term and long-term financial outlook, complementing the President's Budget to be released in the spring of 2009.

"Throughout this unprecedented year, the Treasury Department has worked to achieve and maintain the stability of the financial system with short-term actions, but we must not forget the long-term needs that pose a significant threat to our country's fiscal sustainability," said Treasury Secretary Henry M. Paulson, Jr. "The projected costs for Medicare, Medicaid and other social programs are much greater than the resources that will be available to pay for them. Changes are needed to ensure these programs are fiscally sustainable."

"It is without question that we face extraordinary challenges in our financial markets and the larger economy," said OMB Director Jim Nussle. "As a result, the bottom-line budget results in the short-term are sobering. It is imperative to continue to aggressively confront today's challenges. Functioning markets and a healthy economy will not only help put the federal budget back on a path towards balance, but will position us to take on inevitable future economic challenges, such as the our nation's biggest budgetary challenge, the entitlement crisis."

Revenue results in this year's Financial Report were $2.7 trillion, increasing slightly by $34 billion or just over 1 percent, compared to last year. Total costs were $3.6 trillion, an increase of $.7 trillion or 25 percent compared to last year. Net operating cost increased to $1 trillion, up from last year's net operating cost of $275.5 billion. The growth in the net operating cost resulted from the economic slowdown, the government's response to the slowdown, and significant re-estimates of the government's long-term liabilities for veterans' disability compensation benefits.

Treasury projected an estimated present value of future social insurance program expenditures for all current and future program participants to be $43 trillion. Over the next two decades, Social Security and Medicare expenditures are projected to increase from their current 8 percent of GDP to about 11 percent. Without reform, the cost of these programs is projected to approach 18 percent of GDP by 2080. Medicare, Medicaid, and Social Security accounted for 16 percent of total government expenditures 40 years ago. Today, they comprise 40 percent of all expenditures.

The report also discusses the steps the federal government has taken to restore stability to the U.S. financial system. Although recently passed housing and economic stabilization laws authorize the government to spend money in the recovery effort, the majority of those funds have yet to actually be spent and, as a result, are not and would not be reported in the government's consolidated financial statements. Amounts spent under the stabilization initiative have been and are expected to be treated as investments or loans, as the government may recover, and possibly even earn a positive return on amounts invested as economic conditions improve.

Each year, the Administration issues two reports, which detail the financial results for the

government. The President's Budget, the government's primary financial planning and control tool, describes how the government spent and plans to spend the money it collects. By comparison, the accrual-based Financial Report of the United States government includes the cost of operations, the sources used to finance those costs, how much the government owns and owes, and the outlook for its social insurance programs.

Although certain accounting and internal control challenges continue to prevent the Government Accountability Office from rendering an unqualified opinion on the government's consolidated financial statements, significant progress was made in fiscal year 2008 to improve the reliability of the government's financial information. Of the major federal agencies, 20 received clean opinions, one more than reported last year and the highest total in the past six years. The State Department intends to re-issue its audited financial statements with a clean opinion for fiscal year 2008 based on the updated report its auditor issued on December 12. The information on the updated audit report was not available in time to include in the final version of the Financial Report, which reflects a fiscal year 2008 "disclaimed" opinion for the State Department.

In addition, the number of material weaknesses government-wide declined by 18 percent, from 39 to 32. This is the fifth consecutive year that material weaknesses have declined, with a nearly 50 percent decrease in weaknesses since 2001.

For the past four years, Treasury has issued the report on December 15 or the first business day following that date, well ahead of the statutory March 31 deadline. As the issues discussed in the Report affect, and should be of interest to every citizen, for the second consecutive year, the Department is also releasing an accompanying Citizen's Guide to the Financial Report. The report and the guide are available at http://www.fms.treas.gov/fr/index.html.

http://www.ustreas.gov/press/releases/hp1328.htm

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Yellowstone Earthquakes Raise Fears

AOL News
January 3, 2008

Several more earthquakes rattled Yellowstone National Park on Friday, raising fears over the recent geological activity in the area.

Since Dec. 26, about 400 temblors have rumbled under the park, centered under the northern end of Yellowstone Lake. The small quakes Friday registered up to a magnitude of 3.5.

Swarms of small earthquakes happen frequently in Yellowstone, but it’s very unusual for so many earthquakes to happen over several days, says Robert Smith, a professor of geophysics at the University of Utah.

“They’re certainly not normal,” Smith said. “We haven’t had earthquakes in this energy or extent in many years.”

“Could it develop into a bigger fault or something related to hydrothermal activity? We don’t know. That’s what we’re there to do, to monitor it for public safety.”

Smith said it’s difficult to say what might be causing the tremors. He pointed out that Yellowstone is the caldera of a volcano that last erupted 70,000 years ago.

Read article

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