Even after a former actress in erotic films had accused Hewlett-Packard’s chief executive, Mark V. Hurd, of sexual harassment, the company’s board stood behind him.
The directors had often talked with him about taking the world’s biggest technology company back to its roots as an innovator after the big-ticket acquisitions of 3Com and Palm. They doubted that Mr. Hurd, ever meticulous and boastful of his integrity, could commit such unscrupulous acts, according to people with knowledge of the board’s thinking.
But when he settled the woman’s harassment complaint in a late-night meeting before the board’s investigators had a chance to speak with her, the directors deemed his behavior just too troubling.
H.P.’s board rushed out Mr. Hurd’s resignation the next day, on Aug. 6. What has followed is a stream of leaks from both sides resulting in a very public imbroglio. The drama between staid H.P. and equally staid Mr. Hurd continues in a fashion quite unlike executive departures of its kind.
The company has uncovered communications between Mr. Hurd and Jodie Fisher, the occasional H.P. contractor who accused him of sexual harassment, that seemed cordial, even after a last meeting in a hotel room in Boise, Idaho, a person with knowledge of Mr. Hurd’s e-mails said.
But the board was increasingly troubled that Mr. Hurd had been so willing to put Ms. Fisher, whose job was to introduce Mr. Hurd to customers at H.P. marketing gatherings, in front of top customers at upscale company events. Nor could they fathom how Mr. Hurd could authorize more than $75,000 in payments and expenses, including first-class travel and stays in luxury hotels, for Ms. Fisher when the company’s employees traveled under more austere conditions, according to several people with knowledge of the expenses.
Mr. Hurd has been portrayed as engaging in increasingly questionable behavior as H.P. examined his relationship with Ms. Fisher. The directors could not grasp how he could defend having a close personal relationship with an expensive contractor and play down her background in sexually charged films like “Intimate Obsession” and “Body of Influence 2.” She also posed partly nude in Playboy while in college in the early 1980s.
Simply put, he lost the board’s trust, said people with knowledge of the board’s thinking.
A person close to Mr. Hurd counters that H.P. officials are trumping up a version of events in conversations with reporters.
“Mark Hurd is shocked and enraged by allegations from an H.P. board source that by settling an unfounded sexual harassment claim he was impeding the board from learning the truth,” said this person close to Mr. Hurd.
Mr. Hurd had been encouraged by the directors to settle the claims for weeks, the person said.
People close to Mr. Hurd have argued that certain board members overreacted to the sexual harassment charges and the possible negative publicity if word of them leaked.
Company officials, meanwhile, have publicly stated that Mr. Hurd’s behavior ran far afoul of company policy. In particular, Mr. Hurd has been accused of trying to hide an inappropriate relationship with Ms. Fisher by altering his expense reports.
An H.P. spokeswoman, Christina Schneider, declined to comment on the matter.
Regardless, the company is getting exactly what it had hoped to avoid. It hired Kent Jarrell, a crisis management expert from the public relations firm APCO Worldwide, soon after the board received the harassment complaint at the end of June. Mr. Jarrell wrote a mock news story for the board, saying it could expect headlines about H.P.’s having a soft-core pornography star working its events, people with knowledge of Mr. Jarrell’s work said.
“This history here is important,” said Scott Stern, a business professor at the Sloan School of Management at M.I.T.
Federal regulators are keeping a close eye on the H.P. board’s behavior after a scandal several years ago when factions of H.P.’s board spied on other members of the board, journalists and employees in an attempt to stop leaks. “This is a very proud company with a great history,” Mr. Stern said. “The fact is that you could understand that the board would be trigger-shy about public controversy.”
Mr. Hurd, according to those close to him, found it baffling that the company would disclose the sexual harassment case after a company investigation turned up no wrongdoing.
The accusations linking Mr. Hurd to improper spending resonate because he had built up a culture of severe financial accountability at H.P. A former H.P. executive said that Mr. Hurd’s meetings were known internally as “rectal exams” because of the fierce questioning.
“If you put up a slide with lower financial forecasts, he would spot it right away,” the executive said, requesting anonymity because he still deals with H.P. “Then, he would demand that you fix the situation.”
Stories abound of Mr. Hurd’s slicing into marketing costs and making employees fight for every dollar in the budget (although Mr. Hurd often found marketing money to sponsor tennis events, uniting his love of the sport with H.P.).
It’s this history that made Mr. Hurd’s recent behavior stand out to the board.
The situation was made worse after H.P. discovered that Mr. Hurd had viewed some of Ms. Fisher’s racy acting on his work computer, signaling that he was aware of her past.
Mr. Hurd has told people that he did a brief Google search of Ms. Fisher in April or May of 2009, nearly two years after she started contract work for H.P.
Lawrence J. Ellison, the chief executive of Oracle, called H.P.’s board cowardly in an e-mail to The New York Times. And plenty of pundits went on to say that H.P. should not have let Mr. Hurd go simply because he left Ms. Fisher’s name off some expense report filings.
A number of outsiders have complimented H.P.’s board for its decisive action, noting that the company’s board has operated under a microscope because of past transgressions.
William W. George, a professor of management practices at the Harvard Business School, said H.P. had made the right decision and that Mr. Hurd needed to move on. “I think once it’s settled, you need to walk away,” Mr. George said. “If he comes to grips with this, he is going to come back and have great leadership roles.”
This story originally appeared in the The New York Times
Monday, August 16, 2010
Storm over Israeli 'abuse' photos - Middle East - Al Jazeera English
A former Israeli soldier has sparked controversy after posting pictures of herself on Facebook posing with bound and blindfolded Palestinian prisoners.
The photographs show Eden Abergil positioned provocatively with the men, prompting lurid comments from other users of the popular social networking site.
The pictures, which were uploaded into a folder entitled "Army - the best time of my life," and associated comments were discovered by bloggers, who circulated them on the internet on Monday.
Palestinians have long claimed that they are subject to humiliating and degrading treatment while held in Israeli custody, but Israeli authorities have always rejected such allegations.
The Israeli military has sought to distance itself from the controversy, saying Abergil is no longer a serving member of the country's army.
"This is shameless behaviour by the soldier," a military spokesman told Al Jazeera.
"In light of the fact that she was discharged last year, all of the details have been turned over to the commanders for further attention."
Humiliating treatment
Abergil was discharged from the military a year ago, meaning authorities had no power to prevent her from posting the pictures on the internet.
The photographs were removed from the website late on Monday.
But Ghassan Khatib, the Palestinian Authority spokesman, said that the images typified the treatment meted out to Palestinians by Israeli troops.
"This is an example of life under occupation," he said.
"All aspects of occupation are humiliating. We call on the international organisations, starting with the UN, to work hard to end the occupation, because it is the source of humiliation for Palestinians and a source of corruption for the Israelis."
Sami Ershied, a lawyer based in Jerusalem, told Al Jazeera that the pictures show illegal activity.
"It's illegal to humiliate prisoners in this way," he said.
"It's illegal to publish these pictures in public showing this soldier making fun of these prisoners."
Special unit
It is not the first time that the Israeli military has been embarrassed by material posted on the internet.
In March, officers were forced to call off a raid in the West Bank after a soldier posted details, including the time and place, of the operation on Facebook before it took place.
Earlier this year, the Israeli military set up a special unit to monitor information posted online.
Members of the unit scan websites including Facebook, Twitter and MySpace looking for sensitive or embarrassing material.
Israeli authorities have issued strict instructions to soldiers regarding the type of information and photographs that they may post online about themselves and their military service.
Hedge Fund Holdings: Hedge Fund Managers Go Bargain-Hunting in Oil Stocks - CNBC
Top hedge fund managers went bargain hunting in the oil patch in the second quarter, buying shares whose prices had fallen because of BP's Gulf of Mexico well disaster and lower oil prices.
Top managers including billionaire Carl Icahn, Eric Mindich and Dinakar Singh, whose stock picks are closely watched in investment circles, added energy stocks to their holdings as billions of gallons of oil gushed into the Gulf, according to quarterly securities reports filed on Monday.
Others buying energy shares included David Einhorn, former Fidelity Investments star Jeff Vinik and the $22 billion Boston-based fund Adage Capital.
Fund managers must say what U.S. listed equities they owned within 45 days after the quarter ends.
While energy stocks ranked among the worst performers during a quarter that also featured a still unexplained flash-crash and fresh fears that the U.S. economy would recover more slowly, hedge fund managers staked out the sector much like they had with financial firms earlier in the year.
After building his energy holdings slowly at the beginning of the year, Icahn picked up the pace in April, May and June by committing nearly $1 billion to the sector after the Deepwater Horizon drilling platform at BP's Macondo well exploded and sank in the Gulf of Mexico.
The purchases included 2 million shares of oil and gas producer Anadarko [APC 51.94 -0.43 (-0.82%) ] and 240,000 shares of offshore drilling specialist Ensco [ESV 43.80 0.09 (+0.21%) ] sponsored American Depository Receipts, according to documents submitted to the Securities and Exchange Commission Monday.
Icahn also added 2.4 million shares of NRG Energy [NRG 21.92 -0.04 (-0.18%) ], a big power utility. Dinakar Singh's hedge fund TPG-Axon bought 1.4 million shares of Anadarko, while adding 2.1 million shares of drilling services specialist Baker Hughes [BHI 39.93 0.14 (+0.35%) ]and 3.5 million shares of Halliburton [HAL 27.81 -0.29 (-1.03%) ], another major oil services player.
Mindich, whose skills at Goldman Sachs [GS 147.76 -0.32 (-0.22%) ] helped him raise a record $3 billion when he started his fund in 2004, bought 1.3 million shares of BP [BP 38.40 -0.53 (-1.36%) ] and call options to buy 1 million more.
Mindich's $13 billion Eton Park Capital also bought 168,000 shares of Baker Hughes, 165,000 shares of Diamond Offshore Drilling [DO 61.37 0.86 (+1.42%) ], 300,000 shares of Forest Oil [FST 27.81 0.06 (+0.22%) ], 256,000 shares of Marathon Oil [MRO 32.53 -0.23 (-0.7%) ], 420,000 shares of Plains Exploration & Production [PXP 23.50 -0.69 (-2.85%) ] and 237,000 shares of Suncor [SU 31.71 0.12 (+0.38%) ].
Vinik added 3.1 million shares of Exxon Mobil [XOM 59.88 -0.03 (-0.05%) ], 11,000 shares of Ensco and 2 million shares of the Oil Services Holdrs Trust [OIH 102.44 0.20 (+0.2%) ], which owns a basket of 15 stocks in the sector.
Einhorn's Greenlight Capital bought 7.4 million shares of Ensco, just over 5 percent of the company's shares. Ensco "was not involved in the horrible accident, which should not materially impact the company's long-term potential,'' Einhorn wrote in a letter to his investors last month.
Adage, run by former managers from Harvard University's endowment, owned 3.4 million shares of BP at the end of the quarter, up from 124,000 three months earlier. The firm added to existing positions in Anadarko, Ensco and Halliburton.
The bets mark a dramatic change in their portfolios, coming as many other investors pulled their money out. BP's stock price fell over weeks until its value had fallen by half.
Even prominent mutual fund manager Fidelity Investments, where millions of Americans hold their college savings and retirement accounts, appears to have joined the trend.
Fidelity managers added 24.2 million shares of Exxon, leaving it with 74.9 million shares, making it the fifth biggest holding for Fidelity.
It also added 10.9 million shares of BP.
The forms managers filed Monday include only U.S.-listed equity securities and related derivatives. Bonds, other securities and short positions are typically not disclosed. Managers may also omit U.S.-listed equities under certain circumstances or file some holdings on confidential filings.
Current DateTime: 03:25:12 16 Aug 2010
LinksList Documentid: 38729792
* Icahn Boosts Energy Picks
* Oil Prices Slip Again
Copyright 2010 Reuters.
Top managers including billionaire Carl Icahn, Eric Mindich and Dinakar Singh, whose stock picks are closely watched in investment circles, added energy stocks to their holdings as billions of gallons of oil gushed into the Gulf, according to quarterly securities reports filed on Monday.
Others buying energy shares included David Einhorn, former Fidelity Investments star Jeff Vinik and the $22 billion Boston-based fund Adage Capital.
Fund managers must say what U.S. listed equities they owned within 45 days after the quarter ends.
While energy stocks ranked among the worst performers during a quarter that also featured a still unexplained flash-crash and fresh fears that the U.S. economy would recover more slowly, hedge fund managers staked out the sector much like they had with financial firms earlier in the year.
After building his energy holdings slowly at the beginning of the year, Icahn picked up the pace in April, May and June by committing nearly $1 billion to the sector after the Deepwater Horizon drilling platform at BP's Macondo well exploded and sank in the Gulf of Mexico.
The purchases included 2 million shares of oil and gas producer Anadarko [APC 51.94 -0.43 (-0.82%) ] and 240,000 shares of offshore drilling specialist Ensco [ESV 43.80 0.09 (+0.21%) ] sponsored American Depository Receipts, according to documents submitted to the Securities and Exchange Commission Monday.
Icahn also added 2.4 million shares of NRG Energy [NRG 21.92 -0.04 (-0.18%) ], a big power utility. Dinakar Singh's hedge fund TPG-Axon bought 1.4 million shares of Anadarko, while adding 2.1 million shares of drilling services specialist Baker Hughes [BHI 39.93 0.14 (+0.35%) ]and 3.5 million shares of Halliburton [HAL 27.81 -0.29 (-1.03%) ], another major oil services player.
Mindich, whose skills at Goldman Sachs [GS 147.76 -0.32 (-0.22%) ] helped him raise a record $3 billion when he started his fund in 2004, bought 1.3 million shares of BP [BP 38.40 -0.53 (-1.36%) ] and call options to buy 1 million more.
Mindich's $13 billion Eton Park Capital also bought 168,000 shares of Baker Hughes, 165,000 shares of Diamond Offshore Drilling [DO 61.37 0.86 (+1.42%) ], 300,000 shares of Forest Oil [FST 27.81 0.06 (+0.22%) ], 256,000 shares of Marathon Oil [MRO 32.53 -0.23 (-0.7%) ], 420,000 shares of Plains Exploration & Production [PXP 23.50 -0.69 (-2.85%) ] and 237,000 shares of Suncor [SU 31.71 0.12 (+0.38%) ].
Vinik added 3.1 million shares of Exxon Mobil [XOM 59.88 -0.03 (-0.05%) ], 11,000 shares of Ensco and 2 million shares of the Oil Services Holdrs Trust [OIH 102.44 0.20 (+0.2%) ], which owns a basket of 15 stocks in the sector.
Einhorn's Greenlight Capital bought 7.4 million shares of Ensco, just over 5 percent of the company's shares. Ensco "was not involved in the horrible accident, which should not materially impact the company's long-term potential,'' Einhorn wrote in a letter to his investors last month.
Adage, run by former managers from Harvard University's endowment, owned 3.4 million shares of BP at the end of the quarter, up from 124,000 three months earlier. The firm added to existing positions in Anadarko, Ensco and Halliburton.
The bets mark a dramatic change in their portfolios, coming as many other investors pulled their money out. BP's stock price fell over weeks until its value had fallen by half.
Even prominent mutual fund manager Fidelity Investments, where millions of Americans hold their college savings and retirement accounts, appears to have joined the trend.
Fidelity managers added 24.2 million shares of Exxon, leaving it with 74.9 million shares, making it the fifth biggest holding for Fidelity.
It also added 10.9 million shares of BP.
The forms managers filed Monday include only U.S.-listed equity securities and related derivatives. Bonds, other securities and short positions are typically not disclosed. Managers may also omit U.S.-listed equities under certain circumstances or file some holdings on confidential filings.
Current DateTime: 03:25:12 16 Aug 2010
LinksList Documentid: 38729792
* Icahn Boosts Energy Picks
* Oil Prices Slip Again
Copyright 2010 Reuters.
Warren Buffett's Berkshire Hathaway Boosts J&J Stake by a Billion Dollars - CNBC
Warren Buffett's Berkshire Hathaway boosted its stake in Johnson & Johnson [JNJ 58.01 -0.14 (-0.24%) ] by 73 percent between March 31 and June 30, adding 17.4 million shares worth just over $1 billion at today's closing price of $58.01.
Berkshire's holdings in J&J have ranged from a high of 61.75 million shares as recently as September 30, 2008 to a low of 23.89 million shares at the end of this year's first quarter.
In his annual letter to shareholders in February, Buffett said that his largest sales of 2009, including Johnson & Johnson, helped pay for other non-stock purchases, including its acquisition of the Burlington Northern Santa Fe freight railroad.
But he said the sales were not motivated by a belief the stocks would fall in price. "Charlie (Munger) and I believe that all of these stocks will likely trade higher in the future."
J&J shares fell from a high of just over $66 in mid-April to trade around $58-$59 in June, and Buffett presumably took advantage of that decline to buy the stock.
NEW FISERV STAKE
Berkshire added a new 4.4 million share stake in financial data services company Fiserv [FISV 50.07 0.88 (+1.79%) ] during the second quarter.
At today's 4p ET closing price of $50.07 (up 1.8% ahead of the news), Berkshire's stake in Fiserv is worth just over $220 million.
The stock is adding to the day's gains in after-hours trading, up 2.3 percent to $51.20 as of 4:30p ET today.
Wisconsin-based Fiserv, founded in 1984, describes itself as "the leading global provider of information management and electronic commerce systems for the financial services industry."
OTHER MOVES
Berkshire also increased its stakes in:
* Becton Dickinson, up 145,761 shares (+8.4%) to 1,889,889 shares
[BDX 70.63 -0.33 (-0.47%) ]
* Iron Mountain, up 205,200 shares (+2.6%) to 8,000,000 shares
[IRM 22.00 0.03 (+0.14%) ]
* Nalco Holding, up 150,000 shares (+1.7%) to 9,150,000 shares
[NLC 23.30 0.09 (+0.39%) ]
* Sanofi Aventis, up 159,742 shares (+4.1%) to 4,063,675 shares
[SNY 28.75 0.11 (+0.38%) ].
Holdings were trimmed for:
* ConocoPhillips, down 5,069,612 shares (-14.8%) to 29,109,637 shares
[COP 54.93 -0.09 (-0.16%) ]
* Kraft Foods, down 1,520,161 shares (-1.4%) to 105,214,584 shares[KFT 29.45 -0.05 (-0.17%) ]
* Procter & Gamble, down 1,025,748 shares (-1.3%) to 78,071,036 shares, as foreshadowed in Berkshire's Q2 10-Q filing with the SEC.
[PG 59.77 -0.05 (-0.08%) ].
Current Berkshire stock prices:
Class B: [BRK.B 76.84 0.06 (+0.08%) ]
Class A: [BRK.A 115260.0 80.00 (+0.07%) ]
For more Buffett Watch updates follow alexcrippen on Twitter.
Email comments to buffettwatch@cnbc.com
© 2010 CNBC, Inc. All Rights Reserved
Berkshire's holdings in J&J have ranged from a high of 61.75 million shares as recently as September 30, 2008 to a low of 23.89 million shares at the end of this year's first quarter.
In his annual letter to shareholders in February, Buffett said that his largest sales of 2009, including Johnson & Johnson, helped pay for other non-stock purchases, including its acquisition of the Burlington Northern Santa Fe freight railroad.
But he said the sales were not motivated by a belief the stocks would fall in price. "Charlie (Munger) and I believe that all of these stocks will likely trade higher in the future."
J&J shares fell from a high of just over $66 in mid-April to trade around $58-$59 in June, and Buffett presumably took advantage of that decline to buy the stock.
NEW FISERV STAKE
Berkshire added a new 4.4 million share stake in financial data services company Fiserv [FISV 50.07 0.88 (+1.79%) ] during the second quarter.
At today's 4p ET closing price of $50.07 (up 1.8% ahead of the news), Berkshire's stake in Fiserv is worth just over $220 million.
The stock is adding to the day's gains in after-hours trading, up 2.3 percent to $51.20 as of 4:30p ET today.
Wisconsin-based Fiserv, founded in 1984, describes itself as "the leading global provider of information management and electronic commerce systems for the financial services industry."
OTHER MOVES
Berkshire also increased its stakes in:
* Becton Dickinson, up 145,761 shares (+8.4%) to 1,889,889 shares
[BDX 70.63 -0.33 (-0.47%) ]
* Iron Mountain, up 205,200 shares (+2.6%) to 8,000,000 shares
[IRM 22.00 0.03 (+0.14%) ]
* Nalco Holding, up 150,000 shares (+1.7%) to 9,150,000 shares
[NLC 23.30 0.09 (+0.39%) ]
* Sanofi Aventis, up 159,742 shares (+4.1%) to 4,063,675 shares
[SNY 28.75 0.11 (+0.38%) ].
Holdings were trimmed for:
* ConocoPhillips, down 5,069,612 shares (-14.8%) to 29,109,637 shares
[COP 54.93 -0.09 (-0.16%) ]
* Kraft Foods, down 1,520,161 shares (-1.4%) to 105,214,584 shares[KFT 29.45 -0.05 (-0.17%) ]
* Procter & Gamble, down 1,025,748 shares (-1.3%) to 78,071,036 shares, as foreshadowed in Berkshire's Q2 10-Q filing with the SEC.
[PG 59.77 -0.05 (-0.08%) ].
Current Berkshire stock prices:
Class B: [BRK.B 76.84 0.06 (+0.08%) ]
Class A: [BRK.A 115260.0 80.00 (+0.07%) ]
For more Buffett Watch updates follow alexcrippen on Twitter.
Email comments to buffettwatch@cnbc.com
© 2010 CNBC, Inc. All Rights Reserved
If Private Sector Is Hiring, Why Is Jobs Market So Bad? - CNBC
One of the biggest obstacles to job growth may actually surprise most Americans: as fast as the private sector is creating jobs, the government is shedding them. And the cuts are far from over.
Despite all the gloom and doom about the US economy, the private sector actually created 620,000 jobs over the past seven months, far faster than in the previous two recessions.
"The private sector is adding jobs now—that's good--because a year ago we were sliding toward oblivion,' says Heidi Shierholz, an economist at the Economic Policy Institute.
The problem, economists say, is that the pace of hiring in the private sector can't keep up with all the layoffs by cash-strapped federal and local governments.
"It puts more pressure on the private sector to compensate for it," says Christian Weller of the Center for American Progress and the University of Massachusetts.
Another complication: The economy shed so many jobs during the recession—nearly three million in the second half of 2008 alone—that even a sizeable gain in private sector hiring can't make much of a dent in overall unemployment.
"The pace of growth is slow," Shierholz says. "How long will it take to get back to anything that looks like a recovery?"
Were it not for the remaining 2010 Census jobs, state, local and federal government payrolls would be below their January 2009 low of 22.48 million.
That level will certainly be breached in the coming months, as more Census jobs are shed and state and local governments follow through on job cuts.
Between 2009-2011, these governments are expected to slash 8.6 percent of their workers, according to a July outlook by three government associations.
"It's very likely they’re going to continue to shed jobs well in 2011," says Chris Hoene, reserach director at the National League of Cities, which helped prepare the report.
Another 200,000 jobs could easily disappear. That may not seem a lot, but consider that government payrolls never shrank during or after the 1990-1991 recession. In the 2001-2004 recession-recovery period, payrolls were never more than 85,000 below their expansionary peak.
"States didn't get their fiscal house in order when they had a chance," says Weller. "They thought the great, wonderful slush funds in the form of property taxes in the the boom years would never end."
Still, there are some grounds for optimism. The gains in private sector jobs have been broad-based, covering manufacturing, travel, health care, education, business services and even retail.
Not surprisingly, hard-hit sectors at the center of the 2008-2009 downturn—construction and financial--are still struggling, but nevertheless showing signs of stabilizing. Commercial construction, for instance, added 9,000 jobs in July.
"That's certainly a positive sign," says Weller.
Still, economists say it will remain an uphill climb.
"Its going to be a long, frustrating, different experience," says David Resler, chief economist at Nomura Securities. "This is not a normal business cycle."
© 2010 CNBC.com
Despite all the gloom and doom about the US economy, the private sector actually created 620,000 jobs over the past seven months, far faster than in the previous two recessions.
"The private sector is adding jobs now—that's good--because a year ago we were sliding toward oblivion,' says Heidi Shierholz, an economist at the Economic Policy Institute.
The problem, economists say, is that the pace of hiring in the private sector can't keep up with all the layoffs by cash-strapped federal and local governments.
"It puts more pressure on the private sector to compensate for it," says Christian Weller of the Center for American Progress and the University of Massachusetts.
Another complication: The economy shed so many jobs during the recession—nearly three million in the second half of 2008 alone—that even a sizeable gain in private sector hiring can't make much of a dent in overall unemployment.
"The pace of growth is slow," Shierholz says. "How long will it take to get back to anything that looks like a recovery?"
Were it not for the remaining 2010 Census jobs, state, local and federal government payrolls would be below their January 2009 low of 22.48 million.
That level will certainly be breached in the coming months, as more Census jobs are shed and state and local governments follow through on job cuts.
Between 2009-2011, these governments are expected to slash 8.6 percent of their workers, according to a July outlook by three government associations.
"It's very likely they’re going to continue to shed jobs well in 2011," says Chris Hoene, reserach director at the National League of Cities, which helped prepare the report.
Another 200,000 jobs could easily disappear. That may not seem a lot, but consider that government payrolls never shrank during or after the 1990-1991 recession. In the 2001-2004 recession-recovery period, payrolls were never more than 85,000 below their expansionary peak.
"States didn't get their fiscal house in order when they had a chance," says Weller. "They thought the great, wonderful slush funds in the form of property taxes in the the boom years would never end."
Still, there are some grounds for optimism. The gains in private sector jobs have been broad-based, covering manufacturing, travel, health care, education, business services and even retail.
Not surprisingly, hard-hit sectors at the center of the 2008-2009 downturn—construction and financial--are still struggling, but nevertheless showing signs of stabilizing. Commercial construction, for instance, added 9,000 jobs in July.
"That's certainly a positive sign," says Weller.
Still, economists say it will remain an uphill climb.
"Its going to be a long, frustrating, different experience," says David Resler, chief economist at Nomura Securities. "This is not a normal business cycle."
© 2010 CNBC.com
Robert Gates to retire in 2011 - Americas - Al Jazeera English
Robert Gates, the US secretary of defence, has said that he intends to leave his post sometime in 2011.
In an interview with the US magazine Foreign Policy,Gates said "it would be a mistake to wait until January 2012".
"This is not the kind of job you want to fill in the spring of an election year", he told the magazine.
Gates, 66, took office in December 2006 under President George Bush but was kept on the job after Barack Obama assumed the presidency in 2009.
If he stays in office into 2011, he will be the fifth-longest-serving defence secretary in American history.
'Wilder ideas'
As defence secretary, Gates has managed the wind-down of the war in Iraq and a changing Pentagon whose budget he aims to trim.
He has also overseen the war in Afghanistan and Obama's surge of some 30,000 military personnel, who will finish arriving this year even as the United States promises to begin withdrawing from the country in July 2011.
"What you saw with Robert Gates, particularly ... under Barack Obama, was someone who was able to take some of his wilder ideas for transforming the way the defence department does its job and actually start putting into play some of those ideas," Al Jazeera's Rosalind Jordan, reporting from Washington DC, said.
In 2009, Gates and a team of reviewers decided to eliminate, defund or restructure 33 programmes within the defence department, according to the Foreign Policy article.
Among the more controversial was Gates' decision to halt the production of the F-22 Raptor stealth fighter plane, a darling of the Air Force that would have cost the US tens of billions of dollars over the coming years.
"The question is whether someone who follows [Gates] can see that process through", Jordan said.
Afghan review
In the Foreign Policy interview, Gates noted that the Obama administration's upcoming assessment of its strategy in Afghanistan will be complete by the end of December.
"The point ... is I think that by next year I'll be in a position where, you know, we're going to know whether the strategy is working in Afghanistan. We'll have completed the surge. We'll have done the assessment in December. And it seems like somewhere there in 2011 is a logical opportunity to hand off", he said, according to a transcriptposted on the magazine's website.
Gates also said he fears it will be harder to find an adequate replacement for himself in 2012, as the Obama White House gears up for a likely re-election campaign.
"I think we might have trouble getting the kind of person they want if there's a possibility that they might only be in the job for a year", he said, referencing the chance that Obama could lose an election.
"You know, who knows what the election situation will look like. But also I just think this is not the kind of job you want to fill in the spring of a presidential election. So I think sometime in 2011 sounds pretty good".
Successor speculation
In another post on Foreign Policy's website,reporter Josh Rogin listed some notables in the American capital rumoured to be possible choices should Obama need to replace Gates.
They include Michèle Flournoy, the undersecretary of defence for policy, John Hamre, the president of the Centre for Strategic and International Studies, Leon Panetta, the director of the Central Intelligence Agency, and Richard Danzig, a former secretary of the navy.
Source: Al Jazeera
In an interview with the US magazine Foreign Policy,Gates said "it would be a mistake to wait until January 2012".
"This is not the kind of job you want to fill in the spring of an election year", he told the magazine.
Gates, 66, took office in December 2006 under President George Bush but was kept on the job after Barack Obama assumed the presidency in 2009.
If he stays in office into 2011, he will be the fifth-longest-serving defence secretary in American history.
'Wilder ideas'
As defence secretary, Gates has managed the wind-down of the war in Iraq and a changing Pentagon whose budget he aims to trim.
He has also overseen the war in Afghanistan and Obama's surge of some 30,000 military personnel, who will finish arriving this year even as the United States promises to begin withdrawing from the country in July 2011.
"What you saw with Robert Gates, particularly ... under Barack Obama, was someone who was able to take some of his wilder ideas for transforming the way the defence department does its job and actually start putting into play some of those ideas," Al Jazeera's Rosalind Jordan, reporting from Washington DC, said.
In 2009, Gates and a team of reviewers decided to eliminate, defund or restructure 33 programmes within the defence department, according to the Foreign Policy article.
Among the more controversial was Gates' decision to halt the production of the F-22 Raptor stealth fighter plane, a darling of the Air Force that would have cost the US tens of billions of dollars over the coming years.
"The question is whether someone who follows [Gates] can see that process through", Jordan said.
Afghan review
In the Foreign Policy interview, Gates noted that the Obama administration's upcoming assessment of its strategy in Afghanistan will be complete by the end of December.
"The point ... is I think that by next year I'll be in a position where, you know, we're going to know whether the strategy is working in Afghanistan. We'll have completed the surge. We'll have done the assessment in December. And it seems like somewhere there in 2011 is a logical opportunity to hand off", he said, according to a transcriptposted on the magazine's website.
Gates also said he fears it will be harder to find an adequate replacement for himself in 2012, as the Obama White House gears up for a likely re-election campaign.
"I think we might have trouble getting the kind of person they want if there's a possibility that they might only be in the job for a year", he said, referencing the chance that Obama could lose an election.
"You know, who knows what the election situation will look like. But also I just think this is not the kind of job you want to fill in the spring of a presidential election. So I think sometime in 2011 sounds pretty good".
Successor speculation
In another post on Foreign Policy's website,reporter Josh Rogin listed some notables in the American capital rumoured to be possible choices should Obama need to replace Gates.
They include Michèle Flournoy, the undersecretary of defence for policy, John Hamre, the president of the Centre for Strategic and International Studies, Leon Panetta, the director of the Central Intelligence Agency, and Richard Danzig, a former secretary of the navy.
Source: Al Jazeera
Financial Services - Call for Careful Overhaul of US Mortgage Lending - CNBC
The US does not intend to wind down completely Fannie Mae and Freddie Mac, the large government-sponsored mortgage companies that are eating up billions of taxpayer dollars, given the fragile state of the housing market.
Administration officials say that any credible proposal to overhaul the government-sponsored enterprises, as Fannie and Freddie are called, would need to include a “thoughtful approach” to prevent house prices from dipping lower.
Fannie [FNMA 0.3755 0.0005 (+0.13%) ] and Freddie [FMCC 0.4 --- UNCH (0) ] buy or guarantee more than 90 percent of loans currently being issued.
Without government backing, some large investors have said they would stop buying mortgage bonds, a development that would be catastrophic both for the housing market and the broader economy.
The overhaul of Fannie and Freddie remains one of the most challenging problems of the financial crisis, and one that was noticeably absent from the reform regulation signed into law earlier this summer.
Pressure is building on the Obama administration, which has promised to submit a proposal to Congress by January, to find a solution.
Since being taken over by the government in 2008, Fannie and Freddie have absorbed nearly $150 billion in aid, making them by far the costliest part of a bail-out that rescued carmakers and financial institutions.
The Treasury has been canvassing a wide array of private sector bankers and public policy experts, many of whom are listed to speak at a conference tomorrow, which will be chaired by Tim Geithner, Treasury secretary, and Shaun Donovan, the secretary for housing and urban development.
Treasury officials have been reading more than 300 comments received in response to seven questions posted earlier this year in a public forum.
No one wants to see the GSEs survive in their current form, but neither do they want to upset the mortgage market at such a crucial time. Beyond that there is little agreement on how to proceed.
Conservatives argue that the private markets, not the government, should provide financing for home loans. But liberals say the government should have some role. They point out that the private markets seized up during the credit crisis.
“It’s clear there is no good short-term solution,” said Rajiv Setia, of Barclays Capital.
Last month Mr Geithner promised that an overhaul of Fannie and Freddie would bring “fundamental change” and that they would not survive “in anything like their current form”.
But he added: “I think there’s going to be a good case for taking a look at preserving or putting in place a carefully designed guarantee so, again, homeowners have the ability to borrow to finance a home, even in a very difficult recession.”
Administration officials say that any credible proposal to overhaul the government-sponsored enterprises, as Fannie and Freddie are called, would need to include a “thoughtful approach” to prevent house prices from dipping lower.
Fannie [FNMA 0.3755 0.0005 (+0.13%) ] and Freddie [FMCC 0.4 --- UNCH (0) ] buy or guarantee more than 90 percent of loans currently being issued.
Without government backing, some large investors have said they would stop buying mortgage bonds, a development that would be catastrophic both for the housing market and the broader economy.
The overhaul of Fannie and Freddie remains one of the most challenging problems of the financial crisis, and one that was noticeably absent from the reform regulation signed into law earlier this summer.
Pressure is building on the Obama administration, which has promised to submit a proposal to Congress by January, to find a solution.
Since being taken over by the government in 2008, Fannie and Freddie have absorbed nearly $150 billion in aid, making them by far the costliest part of a bail-out that rescued carmakers and financial institutions.
The Treasury has been canvassing a wide array of private sector bankers and public policy experts, many of whom are listed to speak at a conference tomorrow, which will be chaired by Tim Geithner, Treasury secretary, and Shaun Donovan, the secretary for housing and urban development.
Treasury officials have been reading more than 300 comments received in response to seven questions posted earlier this year in a public forum.
No one wants to see the GSEs survive in their current form, but neither do they want to upset the mortgage market at such a crucial time. Beyond that there is little agreement on how to proceed.
Conservatives argue that the private markets, not the government, should provide financing for home loans. But liberals say the government should have some role. They point out that the private markets seized up during the credit crisis.
“It’s clear there is no good short-term solution,” said Rajiv Setia, of Barclays Capital.
Last month Mr Geithner promised that an overhaul of Fannie and Freddie would bring “fundamental change” and that they would not survive “in anything like their current form”.
But he added: “I think there’s going to be a good case for taking a look at preserving or putting in place a carefully designed guarantee so, again, homeowners have the ability to borrow to finance a home, even in a very difficult recession.”
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