Planned job cuts by US employers fell to 76,456 in August, down 21% from 97,373 in July says, Challenger, Gray & Christmas. Although job cuts slowed they are up 1.07 million from January through August - 60% higher yoy.

The Inspector General has found the SEC incompetent, but not corrupt. We disagree - the SEC is corrupt, particularly in the Madoff scam. The current SEC Madoff probe is another scam. Money has yet to be found in any substantial amounts. The Fed, the NY fed and the Treasury know where all the money went and that is to offshore havens and Israel. That means high-ranking members of the SEC were in on it. We have not heard the end of this yet, and the results will be shocking.

          James Traficant, former Ohio representative, walked out of a Minnesota prison yesterday morning after serving a seven-year sentence for bribery and racketeering.

          Federal prosecutors hit Pfizer Inc. with a record-breaking $2.3 billion in fines yesterday and called the world’s largest drug maker a repeating corporate cheat for illegal drug promotions that plied doctors with free golf, massages, and resort junkets.

          Announcing the penalty as a warning to all drug manufacturers, Justice Department officials said the overall settlement is the largest ever paid by a drug company for alleged violations of federal drug rules, and the $1.2 billion criminal fine is the largest ever in any US criminal case. The total includes $1 billion in civil penalties and a $100 million criminal forfeiture.

          Drug maker Schering-Plough Corp. has been denied a $473 million tax refund by a federal judge who ruled the company made two transactions just to avoid paying taxes on $690 million in profits from overseas subsidiaries.

          The money was repatriated, or brought back into the United States. However, US District Judge Katherine S. Hayden in Newark, N.J., found Schering-Plough owed taxes on it, the Justice Department said in a statement yesterday.

          A spokesman said Schering-Plough is considering an appeal.

          The transactions, which occurred in 1991 and 1992, involved interest rate swap agreements created by Merrill Lynch, financial adviser to Schering-Plough, a maker of hepatitis treatments and allergy drugs including Nasonex and Clarinex.

          “The transactions were designed to bring previously untaxed profits made by Schering-Plough’s foreign subsidiaries into the United States without paying the tax owed on repatriation,’’ the statement said.

          It said the court found “the transactions lacked economic substance, did not have a genuine business purpose, and were designed to avoid tax.’’

          Samsonite Co. Stores, the US retail division of luggage-maker Samsonite Corp., sought bankruptcy protection from creditors, citing a decline in demand for travel gear.

          The company, based in Mansfield, Mass., yesterday listed $233 million in assets and $1.5 billion in debts as of July 31 in US Bankruptcy Court in Wilmington, Del.

          “The recession has caused a severe decline in consumers purchasing travel-related goods and the company has responded to this critical situation with a substantial restructuring,’’ Kyle Gendreau, Samsonite’s chief financial officer, said in a statement.

          American Airlines is cutting 921 flight attendant jobs as it deals with an ongoing downturn in traffic and lower revenue.

          The airline said Tuesday that the cuts will take effect Oct. 1.

          Retailers on Thursday posted sales declines for August as shoppers held back on back-to-school purchases and continued to focus on necessities, but overall results came in ahead of analyst predictions.

          A monthly compilation of 31 retailers' results by The International Council of Shopping Centers and Goldman Sachs showed sales in established stores fell 2.1 percent in August compared with the same month in 2008. That was better than the 3.5 percent to 4 percent drop expected.

          About half of the 30 retailers reporting August results missed expectations, but half topped them, according to a poll by Thomson Reuters. The winners were mainly discounters, but declines were less than expected in the specialty apparel and department store sectors as well.

          The U.S. non-manufacturing sector showed some improvement in August but was still contracting, according to data released Thursday by the Institute for Supply Management, a private research group. Prices, however, took their biggest monthly jump on record, thanks to higher energy costs.

          The ISM's non-manufacturing purchasing managers' index rose to 48.4 last month, from 46.4 in July. August's reading was slightly above the 48.0 expected by forecasters surveyed by Dow Jones Newswires. Readings under 50 indicate contracting activity.

          "Respondents' comments are mixed about business conditions and the overall economy; however, there is an increase in comments indicating that there are signs of improvement going forward," said Anthony Nieves, who oversees the survey for the ISM.

          The ISM said its August business activity/production index jumped 5.2 points to 51.3 last month, from 46.1 in July. The new-orders index rose to 49.9 from 48.1 in July.

          The ISM report is comprised mainly of comments from service-sector companies that make up the bulk of the U.S. economy. It follows Tuesday's ISM report on manufacturing that showed an expansion in the factory sector, led by a large jump in new orders.

          Nieves said it wasn't unusual for the factory sector to lead into recovery before the service sector. Regarding non-manufacturing, he said, "We are getting to a sideways leveling-off and well break 50," probably in autumn.

          Thursday's data on the non-manufacturing side of the economy reinforces the idea that the U.S. economy is on the mend, but obstacles remain, especially on the labor front.

          The employment index improved, with the August index at 43.5, from 41.5 in July.

          The number of U.S. workers filing new claims for jobless benefits declined as expected last week but remains at an elevated level, suggesting that the labor market is improving but at a very sluggish pace.

          Meanwhile, total claims lasting more than one week rose.

          Initial claims for jobless benefits fell 4,000 to a 570,000 in the week ended Aug. 29, the Labor Department said in its weekly report Thursday.

          Bankruptcy filings by U.S. consumers rose 24 percent in August compared with a year earlier and could reach 1.4 million this year, according to an American Bankruptcy Institute and National Bankruptcy Research Center report released on Wednesday.

          Despite the spike, consumer bankruptcy filings last month were down 5 percent from July.

          The August bankruptcies brought the 2009 number to 922,000.

          In 2008, a total of 1.1 million consumers filed for bankruptcy, according to ABI.

           Reform of banking will once more top the agenda for finance ministers meeting in London on Thursday, ahead of the main gathering of G20 political leaders in Pittsburgh later this month. 

         …the most eloquent solution to the problem, which like an elephant in the room has from the start been staring everyone in the face, will again go virtually ignored. 

           This is that the banking system be broken up, with a clear separation established between, on the one hand, plain vanilla deposit taking and commercial banking – backed by deposit insurance, access to central banking lender of last resort facilities and the implicit guarantee of taxpayers – and on the other the leveraged “casino”-like activity of investment and international banking which should enjoy none of these safety nets. 

        John Williams offers an explanation that might account for gold’s uptick.  First, growth in broad money supply has continued to falter… weekly reports by the Fed have shown the major M3 components (all seasonally adjusted) of M2, institutional money funds and large time deposits to be in general decline, suggesting that August will show a second consecutive monthly decline — at an accelerating pace — and that year-to-year growth is likely to slow from July’s level of 5.2% to something closer to 4% in August.  Beyond being a negative for the economy, in the ongoing systemic solvency crisis, slowing broad money growth often has signaled rising systemic stress, foreshadowing intensification in the crisis that in turn has led to Federal Reserve or Treasury response.

         Second, the seasonally-adjusted St. Louis Fed’s adjusted monetary base surged by 5.5% in the two weeks ended August 26th, versus the prior two-week period. The latest level is the highest in nearly three months and is 3.8% shy of the record high set in the two-week period ended May 20th. Year-to- year growth jumped to 102.0% in the latest reporting period, versus 91.8% in the prior one. The monetary base remains the Fed’s primary tool for targeting money supply, but it has proven to be of limited impact in boosting money growth, where banks have been leaving their cash with the Fed instead of lending into the normal stream of commerce. Nonetheless, the Fed appears to be pushing here, with consumer and business credit extremely constrained.

       John also notes: Conversations with individuals at both the Bureau of Labor Statistics and the Bureau of  Economic Analysis (the BEA has published a notice), indicate that both the consumer price index (CPI) and the personal consumption(PCE) deflator will reflect new car prices net of the cash-for-clunkers rebates. As a result, lower inflation than would have been seen otherwise is in the works for August. The treatment here seems to be unusual, where automobile dealers are not cutting their profits by offering an added discount. The cars are being sold by dealers at regular prices, it is just that part of the cost of the automobile — up to $4,500 — is being paid for by a third party: U.S. taxpayers.

http://www.shadowstats.com/

          Large businesses, defined as those with 500 or more workers, saw employment decline by 60,000, while medium-size businesses with between 50 and 499 workers declined 116,000.

          Employment among small-size businesses, defined as those with fewer than 50 workers, declined 122,000.   Since reaching peak employment in January 2008, small-size businesses have shed nearly 2.5 million jobs.

          In August, construction employment dropped 73,000. This was its thirty-first consecutive monthly decline, and brings the total decline in construction jobs since the peak in January 2007 to 1,562,000. 

...

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