Volcker: More financial reform needed and Intel’s profit beats Wall Street expectations
City of Industry, CA NEW YORK (CNNMoney.com) — Former Federal Reserve Chairman Paul Volcker said Thursday that more needs to be done to regulate the financial system before the lessons of the recent crisis are forgotten.
“We must not shrink away from change but accept the need for basic financial reform, ” said Volcker, currently chairman of President Obama’s Economic Advisory Board, in remarks to the Economic Club of New York. He said the economy appears to be growing slowly, and that the financial crisis is beginning to seem to some like a “bad dream”.
But the magnitude of the crisis showed that the underlying problems are “more fundamental” and require “broad reform” of the financial system, he warned. The former Fed chairman said the central bank should play a key role in overseeing the financial system. Among his ideas, he said the Fed should have the power to dismantle big banks that pose a systemic risk to the economy. [Read the full article]
NEW YORK (CNNMoney.com) — Intel Corp. posted a fourth-quarter profit that trounced Wall Street expectations Thursday, as the world’s largest microchip maker became the first major technology company to report results for the period. The Santa Clara, Calif.-based company reported a profit of $2.3 billion, or 40 cents per share, during the final quarter of 2009. The income was nearly 10 times higher than the $234 million, or 4 cents per share, that Intel reported for the fourth quarter of 2008.
“Our ability to weather this business cycle demonstrates that microprocessors are indispensable in our modern world,” said Intel president and chief executive Paul Otellini, in a statement. Intel’s (INTC, Fortune 500) quarterly sales rose to $10.6 billion, 28% higher than the $8.2 billion in the same period of 2008. The revenue also topped analysts’ forecast of $10.2 billion. Revenue in the PC client group rose 10% in the quarter, in line with analysts’ predictions. [Read the full article]
Business is slow at AFM Industries, their aerospace tooling shop in Anaheim, Calif., and clients are taking longer than usual to pay. Banks still aren’t lending, and Bob Stubbe doesn’t want to max out his home equity line of credit, especially now. Nor does he want to lose his business — Stubbe believes that as the economy recovers, it will too. His last-ditch option? Raid the 401(k).
The couple used their retirement money about four years ago during another industry downturn, recovered, and started a new 401(k). "I’ve got a sizeable amount in it now again, but this is the nature of the beast," says Stubbe. "What is more important to us, the 401(k) we’ll need in 15-20 years or the survival of the business? I’m 54 years old. Today, I think the business is the most important thing."
Financial advisors view retirement savings — which are protected in the event of bankruptcy — as a sacred cow and rarely recommend using it to fund a business. [Read the full article]