Vice presidential candidates debate 6% unemployment
Felix Salmon from Reuters and Leigh Gallagher from Fortune Magazine wrap up this week’s business headlines.
One question in last night’s debate: whether either President Obama or Gov. Romney can bring the U.S. unemployment number down to 6 percent:
Felix Salmon: No they can’t, and they won’t. And I don’t know where [debate moderator] Martha Raddatz got her 6 percent number from. I mean I guess once it was dropped in their laps, they had to say yes…You can’t respond to that question and say, ‘No I think we’re going to basically go to 7 and stop.’ But that’s realistically all they can promise.
On banks’ record earnings reports today:
Leigh Gallagher: In the case of JPMorgan, it was due to mortgage revenue being up. But interestingly, it wasn’t new homebuyers; the bulk of that activity is refinancing, which tells us that it’s a lot of the low-interest rate environment, but people aren’t out there buying new homes in the way that we would hope they would yet, even though the housing market does seem to be turning up a little bit.
Salmon: They can’t buy new homes because they can’t get mortgages. And they don’t have the down payments saved up, and the banks won’t lend them the money if they don’t have the down payments. So there’s lots of churning in the mortgage market — people are paying off old mortgages and refinancing into new mortgages — and that’s just financial noise really. It’s not real genuine economic activity.
Listen to the entire conversation above.
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