U.S. markets up on Citigroup rescue

NEW YORK, Nov. 24 (UPI) -- The U.S. government's multibillion-dollar rescue of Citigroup Inc. gave a lift to U.S. stock indexes Monday.

The U.S. Treasury, the Federal Reserve and the Federal Deposit Insurance Corp. engineered a rescue that involves the U.S. government absorbing the bulk of Citigroup's already identified $306 billion in toxic assets, The Wall Street Journal reported.

The government will also inject $20 billion in fresh capital into the bank, the Journal said.

In midmorning trading, the Dow Jones industrial average rose 80.84 points, or 1 percent, to 8,127.26. The Standard and Poor's 500 rose 1.15 percent, 9.18 points, to 809.21 . The Nasdaq composite index gained 17.17 points, 1.24 percent, to 1,401.52.

The benchmark 10-year U.S. Treasury bond fell 5/32 to yield 3.258 percent.

The euro rose to $1.2877, compared with $1.2577 Friday. Against the Japanese yen, the dollar rose to 96.24 yen, from 95.93 yen Friday.

In Tokyo, the Nikkei average rose 2.7 percent, up 207.75 points to 7,910.79.

U.S. to rescue Citigroup

NEW YORK, Nov. 24 (UPI) -- U.S. regulators and Citigroup Inc. have negotiated a rescue of the troubled bank that includes a multibillion-dollar one-two punch to contain bank problems.

The plan involves Citibank taking on the first $29 billion in toxic assets on its portfolio, The Wall Street Journal reported Monday. The U.S. government will absorb the rest of at least $306 billion in troubled securities, the Journal reported.

For the protection, Citigroup will issue warrants for the government to purchase Citigroup shares.

Additionally, the Treasury will inject $20 billion in capital into the bank, which already has received $25 billion in capital in the first wave of rescues orchestrated under the government's $700 billion rescue package.

The news comes after a week in which Citigroup was hammered in the marketplace, losing 60 percent of its value as shares fell to a 16-year-low.

Citigroup has $2 trillion in assets and an additional $1.23 trillion in assets, some related to mortgages, that are not reflected on its books. Some investors are concerned the additional assets could represent losses if they are incorporated into the bank's balance sheets, the Journal reported.

Canadian autoworkers to rotate layoffs

INGERSOLL, Ontario, Nov. 24 (UPI) -- Some 1,700 Canadian workers at the joint General Motors-Suzuki Cami Automotive plant in southwestern Ontario voted to share rotating layoffs.

By a 99 percent vote Sunday in Ingersoll, the workers agreed to rotate two weeks on the job and two weeks off to avoid the complete elimination of 600 jobs, the London (Ontario) Free Press reported.

Talks between Cami and the Canadian Auto Workers union began earlier this month about how to handle the layoffs, blamed on slumping sales, the report said.

Mike Van Boekel, plant chairman of CAW Local 88, told the newspaper workers realize the entire automotive sector in southern Ontario is in crisis and said rotating layoffs was the most common sense approach.

"We're trying to make the best of bad news," he told the Free Press. "We will share the pain during the rough times."

Van Boekel said workers were pinning their hopes on a full return to work when Cami introduces a new 2009 model in May.

Job market shifting as recession sets in

WASHINGTON, Nov. 24 (UPI) -- Economists are predicting a rise in U.S. unemployment and a "structural" shift in the job market, resulting in longer periods looking for work.

Many economists predict the recession will push unemployment from 6.5 percent to 8 percent, Time magazine reported. But, economic conditions are also changing, said economist Thomas Lam of United Overseas Bank.

"This doesn't seem like a simple cyclical shift," he said. "What we are seeing is a structural problem in the U.S. economy."

Under present conditions, unemployed workers have a 22 percent chance of finding a job within a month, Lam told Time, but, he added that it could take longer to find work, as the financial sector shrinks and other sectors are left wanting.

In 2009, 2.3 million U.S. workers could lose their jobs, a figure potentially offset by President-elect Barack Obama's promise to create 2 million jobs by 2011, Time reported.

The trend suggests workers need to shift from financial jobs and technology jobs to healthcare opportunities, Time reported.

"Clearly you are going to have people moving down the pay scale," said Dean Baker, co-director of the Center for Economic and Policy Research.

Baker also predicted "an increase in manufacturing," Time reported.

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