Nov. 7 Update: Unemployment Soars; Obama Tackles Economic CrisisThe search for stability continues, as Wall Street dropped for its second day, seeing a total cumulative point drop of more than 900 points. Bad economic and unemployment news continues to drive investors' fears that losses of more than 10 percent for the major indexes and losses of $1.2 trillion in US traded stocks in the days after the election will continue until the market bottoms out.
Corporate earnings reports from Cisco Systems on Thursday showed slumping demand, and retailers reported weak sales for October. Friday's unemployment numbers showed there was an additional 240,000 added to the unemployment rolls in October, and unemployment now is at 6.5 percent -- a 14-year high -- and is expected to climb up as layoffs increase in a wide swath of industries. The only retailer reporting anything positive on sales figures is Wal-Mart.
The economic turmoil presents a new set of problems to the Obama administration, and President-elect Barack Obama's transition team has already met, just one day after the election, to address strategies and how the new President will address the economic recession and offer relief to struggling consumers, industry and the markets.
All of this is despite the federal government's actions to cut interest rates, offer investments to the financial services industry and free up money to create liquidity among banks and loosen the credit crunch that swept across all countries at the beginning of the economic crisis, which exploded in late August.
The Barack Administration is meeting with economic experts today to talk out steps to fix the damaged economy as the crisis gets worse. Business leaders, including Warren Buffett, executives from Google, Xerox, Time Warner and others met with Obama and vice-president elect Joe Biden in Chicago. The new administration is expected to hold its first press conference today after 2 p.m., when it is expected Obama will announce his appointment of Treasury Secretary. Being considered for this key position are Tim Geithner, head of the New York Federal Reserve; New Jersey Governor Jon Corzine, former head of Goldman Sachs; former Treasury Secretary Lawrence Summers, and former Federal Reserve Chairman Paul Volker. Obama has already named his chief of staff, Rohm Emanuel, a former Clinton aide and currently the number four Democrat in the House.
Another key appointment seen as an immediate one is a replacement for Christopher Cox, SEC Chairman, who has already said he plans to step down at the end of the Bush administration. A likely list of replacement candidates include William Brodsky, CEO at the Chicago Board Options Exchange; Mellody Hobson, president of Ariel Capital Management; and Gary Gensler, a former Treasury undersecretary, now at Goldman Sachs.