Claims for U.S. jobless benefits dropped last week from a three-month high, pointing to an improvement in the labor market that is slow to develop.
Initial jobless applications fell by 29,000 to 469,000 in the week ended Feb. 27, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed today in Washington. The number of people receiving unemployment insurance decreased to the lowest level in a year, while those receiving extended benefits climbed.
Some companies are still trimming payrolls to contain costs amid weak sales as the U.S. emerges from the worst recession since the 1930s. An unemployment rate that’s forecast to average 9.8 percent this year may restrain consumer spending, which accounts for about 70 percent of the economy.
“We are in this limbo state where it is not clear if job growth has started yet,” Ethan Harris, head of economics for North America at Bank of America Merrill Lynch Global Research in New York, said in a Bloomberg Television interview. “Many companies say they over-reacted and fired a lot of people, more than they needed to, with the news of the recession. So, we’re expecting broad-based re-hiring.”
Economists forecast weekly claims would fall to 470,000, from a previously estimated 496,000 for the week ended Feb. 20, according to the median of 42 projections in a Bloomberg News survey. Estimates ranged from 440,000 to 515,000.
Stock-index futures rose after the report. Futures on the Standard & Poor’s 500 Index expiring this month increased 0.2 percent to 1,120.4 at 9:03 a.m. in New York.
Productivity Surging
Another Labor Department report today showed the productivity of U.S. workers kept surging in the fourth quarter as companies squeezed more work out of employees to boost earnings.
A measure of employee output per hour rose at a 6.9 percent annual rate, capping the biggest one-year gain since 2002. Labor costs dropped at a 5.9 percent pace, more than anticipated, and fell 1.7 percent for all of 2009, the biggest drop since records began six decades ago.
The four-week moving average of claims, a less volatile measure than the weekly figure, decreased to 470,750 last week from 474,250 the prior week, the report showed freecreditscore.
Continuing claims decreased by 134,000 to 4.5 million in the week ended Feb. 20, the fewest since January 2009. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Extended Benefits
Today’s report showed the number of people who’ve used up their traditional benefits and are now collecting extended payments increased by about 198,000 to 5.87 million in the week ended Feb. 13.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, decreased to 3.5 percent in the week ended Feb. 20 from 3.6 percent the prior week, today’s report showed. Sixteen states and territories had an increase in claims for that same week, while 37 had a decrease.
Unemployment in the U.S. dropped to 9.7 percent in January, while payrolls declined by 20,000, Labor Department figures showed last month. A government report tomorrow is forecast to show the U.S. lost 65,000 jobs in February and the unemployment rate increased to 9.8 percent, according to the survey median.
Some companies continue to cut staff. International Business Machines Corp., the world’s largest computer-services provider, fired about 2,400 workers, mostly in the U.S., according to an employee advocacy group. The cuts this week occurred around the country and across several divisions, said Lee Conrad, national director of Alliance@IBM, which represents some employees.
Recalling Workers
Other businesses are recalling workers. General Motors Co. may fill most of the 5,500 jobs created by its $1.4 billion retooling of 18 U.S. factories with laid-off workers, Diana Tremblay, the automaker’s manufacturing and labor chief, said in an interview Feb. 23.
The company’s 5,000 to 6,000 workers on indefinite layoff have first rights to any openings from the factory upgrades, including a third shift in Lordstown, Ohio, announced last week.
No faxing fast cash advance gets you cash fast and easily.
In the near future, TV is going to be available anywhere, on any device, at any time. Just don’t expect it to be free.
That’s because of the big, unanswered question being asked by networks, cable companies, advertisers and technology providers: How do we make money from it?
Viewers are already taking full advantage of online television. Broadcast networks make many of their shows available on Web sites like Hulu and YouTube a day after they air, and many cable stations also put their shows on the Web.
In December, more than 178 million Americans watched TV online, streaming 33 billion shows, according to online data tracker comScore.
But the business model for free Internet television doesn’t work yet. Networks can’t get advertisers to pay the same as they do for broadcast and cable TV, and networks and cable providers are reluctant to lose their mutually beneficial partnerships.
In the traditional TV model, networks get paid tens of billions of dollars by advertisers and billions more in retransmission fees by cable and satellite providers. Satellite and cable providers get paid in subscription fees by customers.
The free Internet TV model cuts out the middle man: Networks post their content directly online and advertisers pay for the right to place their ads on the Web site and within the video. Satellite and cable providers aren’t part of the equation, and networks lose out on their licensing fees.
Advertisers hesitant to join in
The loss of revenue from cable and satellite companies isn’t the only reason why free Internet TV isn’t working yet. Advertisers remain coy: Broadcast and cable TV advertising is a $70 billion a year business, but Internet TV advertising has yet to crack $1 billion, according to Matt Wasserlauf, chief executive of online advertising network BBE.
Many advertisers are wary of sponsoring online TV, primarily because the measures of those ads’ effectiveness and reach are still up in the air, say media analysts.
"Advertisers aren’t going to pay for the right to sponsor content unless they know how many people are watching it," said Todd Dagres, general partner at Spark Capital. "The technology is available, but it is still in the process of being implemented."
The online video ad world is also a different ball game than the TV commercial sphere. Internet TV ads are interactive, unlike traditional TV ads, and effective Internet TV ads require a whole new level of creativity. Advertisers are still trying to determine the best way to reach potential customers online.
"The way people approach online ads is qualitatively different from the way they approach TV ads," said Shishir Mehrotra, director of video monetization at Google (GOOG, Fortune 500). "The biggest blockers to advertisers from making the jump to the Internet from TV are creative ones."
The lack of live TV online — and the big advertising bucks that come with it — is another huge factor preventing online TV from being successful. Though some networks have begun to air some live content online, notably CBS’s online coverage of the NCAA basketball tournament, live Internet TV is far from pervasive.
Live sporting events like the Super Bowl and live shows like American Idol command the biggest advertising dollars fast cash without a hassle. But separate licensing fees, bandwidth limitations and a low return on investment have held networks back from putting more live content online thus far.
With the business model still shaky, media company CEOs have suggested that free online TV is coming to an end.
How the online TV business can work
With free heading out the door soon, subscription services are the likely replacement.
Media CEOs like News Corp’s (NWS, Fortune 500) Rupert Murdoch, Disney’s Bob Iger and NBC’s Jeff Zucker, who co-own Hulu, have all hinted at making Hulu a subscription-based service. They just haven’t said how much users will have to pay.
Netflix (NFLX) has been operating a successful subscription-based streaming service for quite some time, and on Monday, Walmart (WMT, Fortune 500) announced that it had purchased Netflix’s online streaming video competitor Vudu. In December, Apple said it had negotiated deals with CBS (CBS, Fortune 500) and Disney (DIS, Fortune 500) to launch a streaming subscription-based service for Apple TV.
Cable companies have gotten in on the action as well. CNNMoney.com parent company Time Warner (TWX, Fortune 500) partnered with Comcast (CMCSA, Fortune 500) last summer to test its subscription-based "TV Everywhere," which made Time Warner content available online to Comcast subscribers for no additional charge. Comcast deemed the project a success, and has continued the TV Everywhere partnership on its Fancast Web site.
Subscription services generally bring more content to the Web than free services, including some cable shows that have been exclusively available on TV or for purchase on iTunes.
There’s something in it for the cable companies too: As technology improves and consumers begin watching more online, on-demand content directly on their television sets, cable and satellite providers could have a role in bringing that content to consumers by providing customer service for Internet TV like they do for "regular" TV.
"If consumers want high-quality content with a high-quality experience and high-quality service, there’s a place and a role for companies that have cables piped into your house," said David Wertheimer, executive director of the Entertainment Technology Center at the University of Southern California.
In the end, experts say that the free, advertising-supported model may exist for some content, but the subscription model will have to at least run along side it.
Experts say commoditized programming like news, cooking programs and how-to shows will stay free, because there will always be another site offering the same content for free. But your favorite shows that can’t be duplicated and cost millions of dollars to produce are something you will have to pay for.
"Every piece of content that is commoditized by nature has to be free," said Ran Harnevo, chief executive of 5min Media, an independent digital media group. "On the other hand, if everything were free, you would lose the production value of good shows. So people will have to pay for content that’s not commoditized."
India’s credit rating may be raised from junk if Finance Minister Pranab Mukherjee provides a comprehensive plan to roll back fiscal stimulus and cut the budget deficit this week, Moody’s Investors Service said.
“If we think the exit path is well articulated and well executed, the local currency rating could be upgraded,” Aninda Mitra, a Singapore-based sovereign analyst at Moody’s, said in a telephone interview on Feb. 19. India’s long-term local currency debt is placed at Ba2 by Moody’s, two levels below the investment grade and at par with Armenia and Turkey.
Mukherjee has an opportunity to narrow the budget shortfall as accelerating economic growth boosts tax revenue and a stronger political mandate after last year’s elections paves the way to resume asset sales. Rating changes have less impact on India than other countries like Greece, which borrow more from abroad. India’s foreign borrowings make up only about 4 percent of government debt compared with 83 percent for Greece, according to Citigroup Inc.
Stocks, Bonds Gain
“India has lived with a budget deficit for so long, and with a high growth rate you can run a deficit,” said Andrew Michael Spence, a Nobel prize-winning economist and professor emeritus at Stanford University’s Graduate School of Business. “You don’t want the credit rating to go too low. It’s more signaling rather than anything else.”
India’s budget deficit may narrow to 5.5 percent of gross domestic product in the financial year starting April 1 from 6.8 percent of GDP in the previous year, Chakravarthy Rangarajan, Prime Minister Manmohan Singh’s top economic adviser, said on Feb. 19. Mukherjee is scheduled to unveil the budget in parliament in New Delhi on Feb. 26 at 11 a.m.
Stocks snapped a two-day decline while the yield on India’s benchmark 10-year note fell the most in more than four weeks after Moody’s comment. The rupee gained the most since Feb. 15.
India’s Sensitive Index rose 1.1 percent to 16,369 on the Bombay Stock Exchange and the rupee appreciated 0.3 percent to 46.14 per dollar. Bond yields fell four basis points to 7.84 percent as of 1:24 p.m. in Mumbai.
Indian government debt accounts for about 80 percent of the gross domestic product. Standard & Poor’s and Fitch Ratings have a BBB-, the lowest investment grade rating, on Indian local currency debt.
Positive Outlook
“Although the debt level is high relative to other emerging markets, the fact remains that it’s not increasing sharply,” Mitra said. “It’s hovering around 80 percent of the GDP. So, that’s a reasonably good outcome and which is why we shifted towards the positive outlook,” in December 2009.
Mukherjee, who allowed the budget deficit to widen to provide fiscal stimulus to the economy amid a global recession, is relying on asset sales and faster growth to spur tax collections in next year’s budget.
India’s $1.2 trillion economy may grow 7.2 percent in the current fiscal year through March, accelerating for the first time since 2007, the statistics office said Feb. 8.
Singh’s government plans to reduce stakes in 68 companies including NMDC Ltd., the nation’s largest iron-ore producer, and NTPC Ltd., the biggest electricity provider, after he returned to power in May without the help of communist parties, who as part of the previous coalition had opposed the policy.
Inflation Risk
The government may borrow a net 3.8 trillion rupees in the year starting April 1, compared with 3.97 trillion rupees this year, said Abheek Barua, an economist at the Mumbai-based HDFC Bank Ltd.
Central bank Governor Duvvuri Subbarao last month urged the finance ministry to cut borrowings to support the monetary policy’s goal to contain inflation. Subbarao raised the proportion of deposits lenders need to maintain as cash reserves to 5.75 percent from 5 percent and said monetary policy alone won’t be effective in curbing price-gains unless Mukherjee rolls back fiscal stimulus.
“The growth has rebounded and at the same time there is a risk of inflation,” Mitra said. “Inflation expectations need to be anchored better, either through higher policy rates or if that process could be helped by lower government borrowing and spending.”
India’s inflation accelerated to 8.56 percent in January, the most in 15 months.
“India in on the cusp of a new tryst, which is fiscal destiny, and I hope they will take it,” Mitra said.
The St. Louis area, which has a soft spot for mostaccioli and ravioli, has been one of the top-performing markets for Fazoli’s, the Italian quick-service restaurant chain based in Lexington, Ky.
That’s why Carl Howard, Fazoli’s chief executive, picked this region for the chain’s first new store in more than 3 years.
The new outlet, which opened this week in Edwardsville, is also the first to debut the chain’s new prototype. The new design is smaller than the old model, located in strip centers instead of a stand-alone building, and has a brighter, more modern decor.
"This is a fresh look for us," Howard said in an interview during a visit to the new store. "Our old facility is a little bit stale. We wanted to juice it up and have some fun."
Fazoli’s has undergone more than just a face-lift. In the last year, it has also overhauled about 80 percent of its menu, adding new items such as baked pasta dishes. It has also started using fresher ingredients and revamped everything, from the submarino sandwiches to the marinara sauce.
Fazoli’s had become quiet over the years, Howard acknowledged. Its menu hadn’t kept up with the growing sophistication of the public’s palate. And the previous leaders of the chain let the brand grow stagnant as they sought a buyer for the company, he said.
In 2006, Fazoli’s was finally sold to Sun Capital Partners. Howard came in as CEO two years later. When he took over, the chain had been grappling with declining customer counts for several years at its 280-plus locations. One of his first major decisions was to shut down dozens of underperforming stores. Fazoli’s now has closer to 240 outlets and does $239 million in sales.
"You get rid of your dogs and stick with your stars and all of a sudden your numbers and performance begins to improve," said Darren Tristano, executive vice president of Technomic, a Chicago-based food consultant group.
Now customer visits have been consistently rising since January 2009, Howard said, though he declined to say by how much.
The new Edwardsville site will be followed by six to eight other new Fazoli’s in the next year or so in other strong markets for the company such as Kansas City, and Dayton and
Columbus, Ohio, Howard said.
"We have a Midwest appeal." Howard said. "We have real comfort food."
St. Louis, which now has nine Fazoli’s locations, is the chain’s third-largest market in terms of number of stores, behind only Indianapolis and Lexington.
Kim Tucci, president of St. Louis-based The Pasta House Co., isn’t sweating it as Fazoli’s angles for a larger local presence.
The Pasta House has a very similar logo to Fazoli’s — a fat, red tomato — and has about 20 locations in the metro area and another dozen outside the region. Tucci said his competitors are more along the lines of Macaroni Grill — and not Fazoli’s, which he equated to a fast-food chain like McDonald’s.
"This is like apples and watermelons," he said. "You can’t compare it to what we have — nothing against them."
Tucci added that it makes sense for Fazoli’s to be aggressive in this economy because of their lower price points. The average bill per person at Fazoli’s is just under $6.
Like most other restaurants, Pasta House has been feeling the pinch of the recession as people eat out less. Tucci has responded by lowering his prices. In late December, Pasta House started a promotion offering six pastas for under $6.
"We’re hanging in there," Tucci said. "We’re hustling everyday, 24-7."
As a whole, fast food and fast-casual outlets have done well during the recession — better than the traditional, sit-down restaurants, Tristano said.
The prototype for the new Fazoli’s is about 2,100 square feet — roughly a quarter smaller than their older locations of between 2,700 and 3,100 square feet, Howard said.
"It’s a lot more efficient," Howard said.
By having these smaller stores in strip malls, Howard hopes this will be more attractive to franchises. The start-up costs associated with a new location will be closer to $500,000 compared with as much as $1.7 million for land and the building of the older standalone stores.
"It’s going to be easier to replicate," he said. "There’re a lot of shopping strips for us to go rather than fighting for the last great piece of real estate in a market."
Fazoli’s is also testing out some other innovations at the Edwardsville store — slightly lower prices on some items, a new line of pizzas and bringing back the "breadstick person" who goes table to table.
When it opens its new stores in Dayton in the next several weeks, Fazoli’s will try out other new ideas, such as having real tableware and silverware.
If the innovations do well in these new stores, Fazoli’s hopes to roll out the changes to its other company-owned stores. As for the franchises, Howard hopes that the new elements will be such a hit that they will be motivated to follow suit.
Georgia home prices were essentially flat in October from a month earlier, but are still off significantly from the same period last year, according to a report issued Tuesday.
According to the Standard & Poors/Case-Shiller Home Price Index, the price of a home in Atlanta declined 0.2 percent following monthly rebounds in price over the summer months. Still, prices overall are off 8.1 percent from October 2008, though that figure has narrowed.
The report comes a week after the National Association of Realtors said the sales prices of existing homes in November rose 2.4 percent from the same period last year.
Sales volume was up 33 percent over November 2008, one of the deepest months in the recession, according to the NAR report.
"The turn-around in home prices seen in the Spring and Summer has faded with only seven of the 20 cities seeing month-to-month gains, although all 20 continue to show improvements on a year-over-year basis. All in all, this report should be described as flat," David M. Blitzer, chairman of the index committee at Standard & Poor's, said in a statement.
The annual rate of decline has also improved nationally, and is the ninth straight month of improvement. The 10-city and 20-city composite indices were down 6.4 percent and 7.3 percent, respectively, for October.
Then national price was flat in October compared to September.
Denver was the healthiest market among the 20 cities, posting a 0.1 percent drop in home prices. The decline was 0.6 percent in Dallas, the next-healthiest market, according to the monthly survey.
Las Vegas remained the weakest market among the 20 cities, with a drop of 26.6 percent. It was followed by Phoenix, which saw a price decline of 18.1 percent.
The S&P/Case-Shiller Home Price Index tracks sales prices of typical single-family homes in leading metropolitan areas.
A blizzard paralyzed the region Saturday, putting a serious dent in a weekend that was supposed to be filled with holiday events and lots of shopping.
The storm started dumping snow quickly after 10 p.m. Friday, just as the last of the last-minute shoppers left supermarkets, malls and shopping centers across the region.
Ritchie Highway in Glen Burnie was nearly impenetrable as shoppers rushed in to the many shopping centers along the road to buy what they needed for a weekend stuck in the house. The usual toilet paper, bread and milk shared space in the car with Christmas tree and greens bought at the highway’s many tree lots.
By Saturday morning, most people were staying off the road and the cancellations kept pouring in. So far, the Baltimore Symphony Orchestra’s Holiday Spectacular, a musical review known for its dancing Santas, was still on. The BSO’s Web site said it wasn’t making a decision until 11 a.m. on whether to cancel Saturday’s shows personal loan for poor credit. The Ravens didn’t wait long to make a change, announcing Friday the football game had been moved from 1 p.m. to 4 p.m.
But many retailers weren't about to change their plans despite the storm. This is the busiest weekend of the year for the Sound Garden in Fells Point. The music store was open early Saturday and already had customers milling about its aisles before 10 a.m.
Manager Alex Ashkenes send customers an e-mail telling them the parking lots was plowed and Thames Street was clear. He encouraged shoppers to support local independent businesses.
Reached by phone, Ashkenes was optimistic about the day. He would remain open as long as the weather didn't get too treacherous.
"There are people walking about in Fells Point," he said. "I expect the other stores to open."
Greece sold 2 billion euros ($2.9 billion) of floating-rate notes privately to banks, eight days after Fitch Ratings downgraded the nation’s debt as the government struggles to cut the European Union’s largest budget deficit, two bankers familiar with the transaction said.
The securities, which mature in February 2015, will yield 250 basis points, or 2.5 percentage points, more than the six- month euro interbank offered rate, or Euribor, they said. That’s 30 basis points higher than a similar-maturity Greek fixed-rate bond when converted into a floating rate of interest, according to data compiled by Bloomberg.
Greek bonds have fallen in the past week, with two-year note yields rising by the most in more than a decade on Dec. 8, when Fitch cut the nation’s credit rating to BBB+, the lowest in the euro region, citing the “vulnerability” of the nation’s finances. Prime Minister George Papandreou has been unable to convince investors he can reduce a deficit the government says will rise to 12.7 percent of gross domestic product this year, after the economy shrank 1.7 percent in the third quarter.
“Selling bonds via a private placement can be a double- edged sword at this point,” said Luca Cazzulani, a fixed-income strategist in Milan at UniCredit Markets & Investment Banking. “On the one hand, it shows that Greece can always find buyers for their bonds. But the market might take it as a sign that they only have this channel left.”
Widening Spread
Greek bonds rose snapped two days of declines today, with the yield on the 10-year note dropping 11 basis points to 5.62 percent as of 10:26 a.m. in London. It rose as much as 29 basis points yesterday to 5.76 percent, the highest since April 3.
Concern some countries may struggle to pay their debt was reignited after Dubai’s state-owned Dubai World said on Dec. 1 it wanted to restructure $26 billion of debt. The premium, or spread, investors demand to hold Greek 10-year bonds instead of German bunds, Europe’s benchmark government securities, rose as high as 250 basis points yesterday, the highest closing level since April 2. It narrowed to 239 basis points today guaranteed payday loans.
The participating banks in yesterday’s private placement were National Bank of Greece SA, Alpha Bank AE, EFG Eurobank Ergasias SA, Piraeus Bank SA and Banca IMI SpA, the bankers familiar with the transaction said. Italy’s Banca IMI was the only foreign-based in the group.
Worst Performers
The government paid “generous” terms, said Wilson Chin, a fixed-income strategist in Amsterdam at ING Groep NV.
“I guess you have to pay some liquidity premium, given the sale was done at the end of the year,” he said. “I would be very surprised if they continue to use this method into the first quarter of next year. That would probably be taken as a sign the market isn’t working for them.”
Greek bonds are the worst performers after Ireland among the debt of so-called peripheral euro-region countries this year, handing investors a 3.5 percent return, according to Bloomberg/EFFAS indexes.
In a private placement, issuers offer securities directly to chosen private investors as opposed to selling them through an auction or via a group of banks.
Papandreou pledged in a speech two days ago to begin reducing the nation’s debt, set to exceed 100 percent of GDP this year, from 2012. The European Commission estimates the ratio at 112.6 percent of GDP this year, second only to Italy.
‘Painful Decisions’
“In the next three months we will take those decisions which weren’t taken for decades,” Papandreou said in Athens. He said many choices will be “painful,” though he promised to protect poorer and middle-income Greeks.
Credit-default swaps on Greece rose 1 basis point to 238.5, according to CMA DataVision, after surging 25.5 basis points yesterday. Such swaps pay the buyer face value in exchange for the underlying securities or the cash equivalent should an issuer fail to adhere to its debt agreements. A basis point on a contract protecting $10 million of debt from default for five years is equivalent to $1,000 a year.
The reactor would have command-and-control systems and passive safety features, and be buried in an underground containment building and monitored 24-7 with sensors. It wouldn’t need water for cooling. The fuel would be loaded in the factory prior to delivery and there would be enough to operate nearly 20 years. After that, its uranium fuel cartridge would be switched out with a new cartridge. About 95 per cent of the fuel waste from the old cartridges would be recycled into new fuel.
Sandia isn’t the only group thinking this way. Power-plant equipment maker Babcock & Wilcox has entered the small nuclear market, and a number of start-ups – Hyperion Power and NuScale Power among them – are also blazing a trail.
Shares in Exxon Mobil Corp, the world’s largest publicly traded oil company, could rise more than 20 percent to $90 next year if energy prices increase as expected, Barron’s reported on Sunday.
Exxon shares have lagged rivals in the stock market rally this year, falling about 10 percent, but futures contracts anticipate higher energy prices next year that would be a major boost to the company, according to Barron’s November 16 edition.
The Irving, Texas-based company could earn $6.50 a share in 2010 if the higher oil and natural-gas prices materialize, compared to its expected 2009 profit of $4 a share, the newspaper said. Exxon earned a record $8.69 a share in 2008 when oil prices peaked.
Analysts have criticized Exxon for weak production growth, but it has an impressive record for getting a high return on its investments, according to Barron’s. It replaced more than 100 percent of its production in each of the last 15 years and, between 2004 and 2008, its finding costs of $7 a barrel on average were below its peers, Barron’s said.
In addition, Exxon has a relatively low dividend yield of 2.3 percent, which is below several of its rivals, but analysts estimate the dividend could rise another 5 percent or more in 2010, Barron’s reported.
Exxon shares closed at $72.47 on the New York Stock Exchange on Friday.
(Reporting by Elinor Comlay; Editing by Leslie Adler)
Bonuses at financial firms worldwide will increase by an average of 40% this year, according to an annual report released Monday.
Options Group, a New York-based executive search and compensation consultancy, said near-record revenues from fixed-income, commodities and foreign exchange trading will help push bankers’ bonuses back up after a slump in 2008.
The report, which was based on data from 300,000 industry professionals worldwide, also showed that bonuses are increasingly being offered in the form of multi-year stock options.
Even with this year’s projected rebound, however, bonuses are expected to remain below the record levels of 2007.
Among the financial firms that are expected to increase bonus pay this year are big U.S. banks such as Goldman Sachs (GS, Fortune 500), Morgan Stanley (MS, Fortune 500) and Citigroup (C, Fortune 500).
Last week, Goldman Sachs and Morgan Stanley said they stand to spend $35 billion combined this year on employee compensation.
Wall Street’s compensation practices have been heavily criticized by lawmakers and the public for encouraging the risky behavior that helped cause last year’s financial meltdown.
Indeed, many of the banks that are now planning to raise bonus payments this year received taxpayer-funded bailouts in 2008.
To help prevent a repeat of last year’s crisis, the Federal Reserve is preparing to force big U payday cash advance.S. banks to abide by longstanding rules banning excessive or inappropriate banker pay.
The Fed said last month that a review of bank pay practices will "focus on whether compensation arrangements provide employees incentives to take excessive risks that could threaten the safety and soundness of the banking organization."
The rebound in bonus pay comes as banks around the world have returned to profitability after last year’s crisis forced the collapse of many long-standing investment firms.
The Options Group study revealed that bonuses will be largest for employees who were able to take advantage of rallies in key markets during 2009.
"The areas where professionals will receive largest bonuses are commodities, high-yield and investment grade credit, and equity derivatives," said Michael Karp, co-founder of Options Group.
However, the uptick in bonus pay is partly a reflection of much lower headcounts at many global banking and investment firms.
After last year’s "unprecedented consolidation" in the banking industry, "bonus pools will actually go further this year," according to the report.
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