Economists note a slowing U.S. recovery
NEW YORK, June 25 (UPI) -- Respected U.S. economists are trimming their expectations for 2011, saying growth will not match projections of just a few months ago.
Banking giant Goldman Sachs, which estimated the economy would rise by 4 percent in the second quarter at an annual rate, has cut its estimate in half, The New York Times reported Saturday.
Macroeconomic Advisers has cut their second quarter estimate from 3.5 percent to 2.1 percent. Their estimate for the third and fourth quarters has also been reeled in from an earlier estimate of 4.5 percent growth to 3.5 percent.
The U.S. Federal Reserve also dropped its expectations. Earlier, the Fed said growth for the year would reach 3.9 percent. The latest estimate calls for 3 percent growth for the year.
Fed Chairman Ben Bernanke said the central bank did not have a "precise" explanation for why the pace of the recovery slowed after the first quarter.
Data shows manufacturing has slowed since the first of the year and growth, overall, is slowing in China by design, as policymakers their try to arrest galloping inflation.
High gasoline prices have slowed consumer spending in the United States, but Goldman Sachs Chief U.S. Economist Jan Hatzius said, "Most of the things that looked like they were improving six months ago still look like they are improving."
The gains include consumers paying off debts, which puts consumers on more solid ground, but does not, at the same time, spur manufacturing.
That does not help job growth. In May, the economy added 54,000 jobs, which is not enough to keep up with the number of people joining the workforce each month.
S&P says U.S. downgrade would be costly
NEW YORK, June 25 (UPI) -- Credit ratings firm Standard & Poor's said the cost of a downgrade in the U.S. government's AAA credit rating to investors would be $100 billion.
The S&P unit that came up with the figure is the valuation and risk strategies office, which is separate from the ratings division, The Hill newspaper reported Saturday.
Nonetheless, in putting a dollar figure on a downgrade, managing director Michael Thompson said, "What we're trying to do is give people in the marketplace a prism … to what the effect of (is) of something they've never really bent their minds to."
"People never really went down this analysis because they just thought it was an impossibility," he said.
For years, figuring out the cost of a downgrade in the government's credit rating was thought to have no practical purpose, as it was, in theory, never going to happen.
However, with Republicans threatening to vote no on raising the U.S. debt ceiling, a downgrade is suddenly not only possible, it is lurking nearby.
The Treasury Department has said the deadline for raising the debt ceiling is Aug. 2. After that, the government would have to stop paying about a third of its bills, the department has said.
This week, Republicans said they were pulling out of bipartisan negotiations on budget cuts and the debt ceiling to protest Democrats who have advocated for tax hikes.
The impossibility of the U.S. credit rating slipping? "That's starting to erode a little bit," Thompson said.
Moody's Investors Service has warned the pristine U.S. rating was in jeopardy if an agreement on the budget was not reached soon. Fitch Ratings has said the U.S. outlook could turn from stable to negative if an agreement was not reached by August.
Citigroup pegs hacker loss at $2.7 million
NEW YORK, June 25 (UPI) -- U.S. banking giant Citigroup Inc. said that a recent breach of its computer system has resulted in a loss of $2.7 million for about 3,400 customers.
The bank reported the breach on June 9, and said that data required to commit fraud was not stolen, The Wall Street Journal reported Saturday.
But the hackers, who stole names, credit card account numbers and e-mail addresses, could have matched the Citigroup data with information stolen elsewhere.
"Data that is critical to commit fraud was not compromised," Citigroup had said, naming Social Security numbers, birthdates and credit card expiration dates as information that was not breached.
Also not compromised were credit card security codes, the bank said.
Citigroup has said that account holders will not be reimbursed for fraudulent charges that appear on their accounts.
In the grand scheme of things, the breach was relatively small. Citigroup has 23.5 million credit card accounts assigned to U.S. residents. About 1.5 percent of those accounts were compromised, the Journal said.
As Hulu flirts, Comcast must stay mum
LOS ANGELES, June 25 (UPI) -- While video streaming Web site Hulu looks for a buyer, one of its current principal owners is duty-bound to stay out of the deal making, the government said.
The government allowed Comcast Corp., to purchase Hulu as part of its deal to buy a majority stake of NBCUniversal from General Electric Co.
However, Comcast, had to agree not to harm Hulu, which is, essentially, a rival to the cable company, The Los Angeles Times reported Saturday.
The agreement bars Comcast from participating in the management of Hulu. It went further, ordering Comcast to treat Hulu like any other rival that it did not own.
Hulu, meanwhile, has recently turned to consultants to investigate the possibility of putting itself up for sale and Comcast is required to zip the lip and keep its hands in its pockets until the deal-making is done.
Hulu could end up in the hands of a Comcast rival, the equivalent of sending a star baseball player to another team in the same league and division and having no say in the matter.
