Treasury Invests $1.15 Billion in 42 More BanksThe U.S. Treasury Department on Tuesday said it will invest $1.15 billion in 42 banks across the nation as part of its Capital Purchase Program (CPP). The CPP is a way for the government to put money into healthy, viable banks. It is aimed to increase the flow of loans to small businesses and consumers.
Since it began this program last October, Treasury has invested $195.33 billion in 359 institutions in 45 states and Puerto Rico, representing a wide variety of small, large, regional and national banks, including Community Development Financial Institutions (CDFIs). The largest investment was $25 billion and the smallest about $1 million.
Among the most recent banks to receive Treasury funding was Legacy Bancorp of Milwaukee, WI, a CDFI founded by African-American women and one of the fastest growing community banks in the nation. Farmers and Merchants Bank, a bank that primarily serves farms and rural businesses, was the first Nebraska bank to receive Treasury investments through CPP. Firstbank Corporation of Alma, MI also received CPP funding. The bank has 53 banking offices throughout the state's Lower Peninsula.
Under the CPP, Treasury is purchasing up to a total of $250 billion of senior preferred shares from healthy U.S. financial institutions such as those announced Tuesday. Institutions that participate in the CPP must comply with restrictions on executive compensation during the period that Treasury holds equity issued through the CPP and agree to limitations on dividends and stock repurchases.
More information about the terms of the program, including weekly transactions, can be found at http://www.treas.gov/initiatives/eesa/.
Auto Sales Hit Lowest Levels in 26 Years
The January sales figures at automakers Ford and Toyota dropped more than anticipated and are at the worst levels since 1982, as rental car companies pulled back purchasing cars. Ford says sales fell 39 percent, and Toyota Motor says its U.S. sales dropped 32 percent in January.
The figures were both lower than forecasted by Edmunds.com, a company that tracks auto sales. It had predicted a drop of only 30 percent for Ford and 25 percent for Toyota.
The decrease in travel and demand for rental cars saw top car rental companies Enterprise and Hertz push back purchases. Fleet sales make up more than 20 percent of total industry sales in a regular year.
Analysts predict that all major automakers, including Asian automakers Honda Motor and Toyota, will report sales drops of 25 percent or more for January.
January Layoffs Rise More Than 200 Percent
The month of January was a bad one for layoffs, as the economy continues to take its toll on jobs. Two reports announced on Wednesday say reductions by U.S. companies rose 222 percent from January 2008. One report says layoffs climbed to 241,749, and payroll company ADP says it recorded 522,000 jobs lost.
This number of planned cuts announced in January is the highest in seven years says outplacement firm Challenger, Gray & Christmas. Challenger's report comes before the Labor Department report that will be released on Friday. It is expected to report a loss of 500,000 jobs in January. The unemployment rate is expected to rise to 7.5 percent from its current rate of 7.2 percent.