Friday, 3 Dec 2010 | 8:48 AM ET

Bad Employment Numbers: 39,000 New Jobs—Economists Predicted Number 3.5 Times Higher

Posted By: Ash Bennington

"Crisis-Hit Banks Flooded Fed with Junk" (CNBC via Financial Times) I first wrote about the issue of collateral quality on Wednesday. The story continues, in today's Financial Times: "Banks flooded the Federal Reserve with billions of dollars in 'junk bonds' and other low-grade collateral in exchange for much-needed liquidity during the crisis, as the financial sector struggled under a crippling credit crunch, new data show". Watch for the details of just how bad that collateral really was to emerge over the next few days, as journalists and others continue to pore over the Fed's spreadsheets.

It will take some time to tease out the broader trends from the data; in the meantime, look for thought provoking anecdotes will drive the discussion. For example, the following: "Within a day of easing the collateral requirements, Credit Suisse had borrowed $1 billion from the PDCF, using it for the first of only two times, against a collateral portfolio that was made up of 91 percent equity. "

Bad Employment Numbers: 39,000 New Jobs—Economists Predicted Number 3.5 Times Higher \(CNBC via Reuters\) Bad Numbers: "Nonfarm payrolls rose 39,000, with private hiring gaining only 50,000, the Labor Department said. However, overall employment for September and October was revised to show 38,000 more jobs than previously estimated." The expectations were far higher: "Economists had expected payrolls to increase 140,000 last month and the unemployment rate to be unchanged at 9.6 percent." More raw data: "Employment in the goods-producing sector fell 15,000, weighed down by manufacturing payrolls which fell 13,000 and construction shedding 5,000 jobs. Employment in the private service-providing sector rose 65,000 in November, though retail hiring fell a surprising 28,100 despite expectations of a busy holiday season. The workweek was steady at 34.3 hours in November and average hourly earnings edged up 1 cent."

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  Thursday, 2 Dec 2010 | 4:41 PM ET

The Scandal Of Prediction or Here's What Will Happen in 2011

Posted By: John Carney

I regard prediction as something of a scandal. The world is far too complex and unpredictable for anyone to spend too much time forecasting. For the most part, it’s far better to forego fortune telling and instead figure out how you can be robust and agile enough to deal with unexpected shocks.

Businessman with crystal ball
Fredrik Skold | The Image Bank | Getty Images
Businessman with crystal ball

But when the shadowy benefactors behind NetNet’s infiltration of CNBC issued an edict requiring me to make five predictions for 2011, I set aside my qualms. My very first prediction involves the exit of one of the biggest guys in finance from the corner office. Click here to find out who and read the rest of the predictions.

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  Thursday, 2 Dec 2010 | 4:33 PM ET

Sheila Bair Tells Us to Ignore WikiLeaks Rumors

Posted By: John Carney

Bank of America customers should ignore speculation that the bank could be the next target of WikiLeaks, the head of the FDIC said today.

»Read more
  Thursday, 2 Dec 2010 | 4:04 PM ET

Fed Governor Warns Banks Don’t Have Enough Reserves for GSE Put-Backs

Posted By: John Carney

We were so caught up with the Fed’s big document dump yesterday that we missed the important testimony about put-back risk given yesterday by Federal Reserve governor Daniel Tarullo to the Senate banking committee.

Tarullo message was very clear: the big banks have failed to properly reserved for put-backs.

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  Thursday, 2 Dec 2010 | 2:23 PM ET

Here We Go Again: Banks Face Allegations of 'Racist' Credit Standards

Posted By: John Carney

Banks will be accused of employing discriminatory credit standards when making mortgages in a series of fair housing complaints that a national consumer coalition plans to file beginning next week.

Mortgage application
Mortgage application

The National Community Reinvestment Coalition plans to challenge the widespread practice of requiring borrowers asking for FHA-backed loans to have higher FICO scores than the minimum required by the FHA, according to a report from Ken Harney at New Times .

The FHA requires a minimum FICO score of 500. Borrowers with down-payments as low as 3.5 percent must have a score of at least 580. Borrowers with scores between 500 and 580 must put a minimum of 10 percent down.

Several banks require higher rates. At the start of 2009, many banks moved their minimum FICO score for an FHA backed loan up to 620. Wells Fargo and Bank of America recently raised their required score to 640. FICO scores run from 300 to 850, with higher scores supposedly indicating a lower risk of future defaults.

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  Thursday, 2 Dec 2010 | 2:02 PM ET

Madoff Trustee Sues JPMorgan Chase for $6 Billion

Posted By: John Carney
JP Morgan Chase
JP Morgan Chase

The trustee seeking to recover funds for the victims of Bernie Madoff’s Ponzi scheme is suing JPMorgan Chase for $6.4 billion. He claims that the firm profited from the fraud by acting as the primary banker for Maddoff's investment company.

Here's the official press release from the trustee:

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  Thursday, 2 Dec 2010 | 1:47 PM ET

Yikes! Does That Mean Me?

Posted By: Ash Bennington

The answer I suspect is this: Yes—but only in very small measure.

\(Let's not be grandiose, after all.\)

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  Thursday, 2 Dec 2010 | 12:43 PM ET

Active Managers Having Their Worst Year Ever

Posted By: Jeff Cox

Despite the stock market’s relatively robust performance in 2010, this has been a bad year for active managers—in fact, as bad as it’s ever been.

Just one in four beat their benchmarks for the year, according to data from Bank of America Merrill Lynch, which said this is the “toughest year on record” for active management.

At the same time, the growth guys have mopped up the value guys, no matter what the world’s most famous value investor, Warren Buffett, says.

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  Thursday, 2 Dec 2010 | 12:12 PM ET

Hofmeister: Unemployment and The High Cost Of Obama's Drilling Ban

Posted By: Lori Ann LaRocco

John Hofmeister has been one of the leading critics of the Obama administration's policies curtaining oil and gas drilling.

I interviewed Hofmeister, the former President and CEO of U.S. Operations for Shell Oil and Founder and CEO of Citizens for Affordable Energy, following the announcement that the Obama administration would not allow offshore oil drilling in the eastern Gulf of Mexico or off the Atlantic and Pacific coasts as part of the next five-year drilling plan.

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  Thursday, 2 Dec 2010 | 11:04 AM ET

Here's The Real Reason Why Murdoch Hired NYC Public Schools' Chancellor

Posted By: Julia La Roche
Rupert Murdoch
Nick Laham | Getty Images
Rupert Murdoch

When Rupert Murdoch hired Joel Klein—the now former New York City public schools' chancellor —to be an executive vice president at News Corp last month many were scratching their heads.

Why would a top educator join a media company in the middle of an academic year? And what exactly does Murdoch have in store for Klein?

» Read More

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  • Jeff Cox is finance editor for CNBC.com.

  • Lawrence Develingne

    Lawrence Delevingne is the ‘Big Money’ enterprise reporter for CNBC.com and NetNet.

  • Stephanie Landsman is one of the producers of "Fast Money."

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