The Week: Most Recent Business Posts

The $26 billion foreclosure fraud settlement: By the numbers

The Week — Thu, 09 Feb 2012 14:00:00 -0500

After months of difficult negotiations, government authorities announced Thursday that they have reached a $26 billion settlement with five of the nation's biggest banks over their flawed and fraudulent foreclosure practices. The deal is intended to help troubled borrowers by lowering their mortgage rates and the amounts they owe on their homes. It also will provide restitution to people hit by mortgage-related abuses, such as the "robo-signing" of documents to speed up foreclosures. Who will the deal help, and how much relief will they get? Here, a brief guide to the settlement, by the numbers...

The 12-year-old who saved his grandmother from foreclosure

The Week — Thu, 09 Feb 2012 11:36:00 -0500

Noah Lamaide is not your average 12-year-old. Since he was 9, the Wisconsin boy has been active in community service, largely inspired by his grandmother, Janice Sparhawk, who has served as a foster parent to hundreds of local children. When foreclosure threatened his grandmother's century-old house recently, the young altruist leapt into action. Here, a short guide to this unusual story:

What exactly happened?
After taking out a 2010 loan to put a new roof on her circa 1900 home, Janice Sparhawk, 72, fell behind on the mortgage payments. Eye surgery and complications from asthma forced Sparhawk...

Short sales: The answer to America's housing crisis?

The Week — Wed, 08 Feb 2012 13:40:00 -0500

Banks are stepping up their efforts to get troubled mortgages off their books by offering delinquent homeowners cash incentives to sell their properties at a loss. Are these "short sales" a smart way to clear out the glut of houses in danger of foreclosure and start a housing industry rebound — or will they just depress prices further? Here's what you should know:

What exactly is a short sale?
A transaction in which a house sells for less than the amount the owner owes the bank. The bank agrees to let the homeowner off the hook, and considers the loan paid in full, even though it's not...

The 'unequivocally strong' January jobs report

The Week — Fri, 03 Feb 2012 11:19:00 -0500

Happy new year! The Labor Department announced on Friday that the economy gained an "incredible" 243,000 jobs in the first month of 2012, shocking many analysts who expected modest gains of about 150,000 jobs. The unexpected January hiring spree pushed the unemployment rate down from 8.5 percent to 8.3 percent. Not since the first days of the Obama presidency has the jobless rate been this low. (The unemployment rate was 7.8 percent in January 2009, 8.3 percent in February 2009, and then spent nearly three years bouncing between 8.5 and 10 percent.) The January job gains were broad — benefiting...

Obama's mortgage plan: Who really benefits?

The Week — Thu, 02 Feb 2012 10:36:00 -0500

President Obama on Wednesday unveiled a new mortgage relief plan for an estimated 3.5 million struggling Americans who owe more on their homes than the properties are worth — and, therefore, can't get new loans at today's low rates. By securing these people federally insured loans at reduced rates, Obama says, the program would save borrowers an average $3,000 a year. A new tax on big banks would cover the program's cost — $5 billion to $10 billion — a strategy Republicans oppose. Could Obama's plan really help Americans who are "underwater" on their mortgages?

Helping underwater...

Is D.C.'s deficit obsession undermining the economic recovery?

The Week — Wed, 01 Feb 2012 10:51:00 -0500

The non-partisan Congressional Budget Office released some sobering figures on Tuesday, forecasting deficits hovering near $1 trillion a year until 2017 unless Congress makes good on vows to slash spending and raise new revenue. But the flip side of the prediction is also troubling: If Washington takes such prudent measures — allowing the Bush era tax cuts to expire and going through with spending cuts under last summer's deal to raise the debt ceiling — economic growth will be significantly slower next year. Will Congress' deficit-cutting fever slow down the recovery?

Yes, cutting...

The stock market's 'melt up': Will the rally end painfully?

The Week — Tue, 24 Jan 2012 13:24:00 -0500

Even as European economies flirt with disaster, the U.S. stock market is proving "surprisingly buoyant." The Dow Jones Industrial Average has risen by 19 percent since October, a "melt up" that some market analysts say defies logic, given that the global economic outlook is rather grim and the American economy has yet to make a clear recovery. Do American investors see bright spots others are missing, or are they walking blindly off a cliff?

A disaster is brewing: The European Central Bank is buying massive amounts of bonds, says Michael Sivy at TIME, to prevent interest rates from rising and crushing...

Obama's rejection of the Keystone pipeline: Winners and losers

The Week — Thu, 19 Jan 2012 13:27:00 -0500

As part of last year's payroll-tax deal, congressional Republicans squeezed a seemingly unrelated promise out of President Obama: Instead of punting until after the 2012 election, he'd have to decide by Feb. 21 whether to allow TransCanada to build an oil pipeline from Alberta, Canada, to the Texas Gulf Coast. On Wednesday, Obama made his decision, denying TransCanada's permit request — at least for now. The State Department notes that TransCanada can still reapply for a permit, and the company says it will try again. But in the meantime, the political fallout was swift and immediate...

The Costa Concordia disaster: How badly will it hurt the cruise industry?

The Week — Thu, 19 Jan 2012 08:00:00 -0500

Following last weekend's Costa Concordia disaster, shares in Carnival Corp., which owns the doomed Italian cruise ship, dropped a sharp 17 percent. Competitor Royal Caribbean's stock fell too. The fallout from the tragedy, which left at least 11 people dead, worsened with the release of a recording in which the captain refused to return to his sinking ship and lead the evacuation (he now claims he "tripped and fell" into a lifeboat). Will the deadly wreck scare away passengers and damage the entire cruise industry?

Cruise lines are in trouble: The timing couldn't be worse for the cruise industry...

Will debt downgrades doom the eurozone recovery?

The Week — Tue, 17 Jan 2012 13:45:00 -0500

In the last few days, S&P has docked the credit ratings of France, Italy, Spain, Portugal, Cyprus, Austria, Malta, Slovakia, Slovenia, and the European Financial Stability Facility — the temporary bailout fund charged with rescuing debt-plagued nations. French President Nicolas Sarkozy has shrugged off the loss of his country's sterling AAA credit rating with Standard & Poor's, saying it "changes nothing" for Europe's second-largest economy. And at least initially, investors have taken the news that France is now a mere AA+ in stride — France's borrowing costs...

The German economic colossus

The Week — Fri, 13 Jan 2012 10:37:00 -0500

How did Germany become Europe's dominant economy?
Mostly through simple diligence. Germany doesn't owe its success to spectacular innovations or new industries; it's largely the product of steady, stable growth in existing niche industries, a government/private sector partnership, and the German aversion to excess spending and debt. This successful formula has put Germany radically at odds with its deeply indebted European Union partners. Germany's unemployment in December stood at 6.8 percent; Spain's, by contrast, had risen above 20 percent. While Greece, Spain, Portugal, and Italy are now swallowing...

Will Iran's oil threat lead to $5 gas?

The Week — Wed, 11 Jan 2012 15:32:00 -0500

Iran's increasingly provocative behavior is already having global consequences. Its threat to shut down the critical Strait of Hormuz has unnerved the oil market, pushing prices above $100 a barrel. Of course, the price hikes to date are nothing compared to what we'll see if armed conflict breaks out over Iran's refusal to rein in its nuclear program. Energy analysts warn that war could push prices above $150 a barrel, possibly pushing gasoline prices to $5 a gallon. Could it really get that bad?

In short, yes: For the time being, we're probably safe, says Michael Sivy at TIME. The U.S. could easily...

Did MSNBC fire Pat Buchanan?

The Week — Mon, 09 Jan 2012 11:38:00 -0500

The pairing of pundit Pat Buchanan, one of the nation's most recognizable paleoconservatives, and liberal-leaning MSNBC has always been odd. And now the cable news channel has put Buchanan on indefinite leave. The apparent trigger: Buchanan's rabble-rousing viewpoints in his new book Suicide of a Superpower, which has chapters titled "The End of White America" and "The Death of Christian America." Since the book's release, the former GOP presidential candidate has appeared on the network just once, a promotional spot on Sean Hannity's program. "Because of the content of the book, I didn't think...

The 'heartening' December jobs report: 5 takeaways

The Week — Fri, 06 Jan 2012 11:52:00 -0500

Last year went out with a bang. According to the U.S. Labor Department's monthly jobs report, 200,000 new jobs were added to the economy in December, exceeding expectations and suggesting for all but skeptical spoilsports that the economy is indeed recovering. Here, five takeaways from December's "heartening" report:

1. It's good news for Obama
The unemployment rate unexpectedly fell from 8.6 to 8.5 percent, says Jason Lange at Reuters. That proves that "job creation is shifting into higher gear, and may give President Barack Obama the boost he hoped for ahead of his re-election bid this...

Is Keith Olbermann on the way out at Current TV?

The Week — Thu, 05 Jan 2012 18:12:00 -0500

It sounds all too familiar: Keith Olbermann, who left ESPN in a huff in the 1990s and bailed on MSNBC last year after publicly feuding with his cable bosses, is at odds with network executives again. The newsman, who hosts Countdown and is chief news executive at Current TV, has been off the air for several crucial days during the network's coverage of the Iowa caucuses. Current's president says Olbermann chose not to anchor the election night coverage, with the cable star pushing back, claiming he was "not given a legitimate opportunity to host under acceptable conditions....

Did Yahoo pick the wrong new CEO?

The Week — Thu, 05 Jan 2012 14:30:00 -0500

Four months after CEO Carol Bartz was brutally fired over the phone last fall, Yahoo has named a replacement. The company's board has tapped Scott Thompson, the chief of eBay's PayPal payment service, to lead the struggling internet portal out of troubled waters. Given that Thompson doesn't have a background in media and advertising, many are questioning whether he's really the right man for the job. Did Yahoo pick the wrong new CEO?

Absolutely. He doesn't know Yahoo's business: In 2011, Yahoo rebranded itself as a "premiere digital media company," says Nicholas Carlson at Business Insider. Funny...