Manufacturing index falls to 28-year low
Signs grew that the economy could turn even weaker in 2009, as an index of December manufacturing activity sank to its lowest point in 28 years. Every corner of the sector was down, from bakeries to cigarette-makers to aluminum smelters.
The Institute for Supply Management, a trade group of purchasing executives, said Friday its manufacturing index fell to 32.4 in December, a greater-than-expected decline from November’s reading of 36.2. Wall Street economists surveyed by Thomson Reuters had expected the reading to fall to 35.5.
Components of the index hit historic lows. New orders fell to their lowest level on records going back to 1948. December’s reading is the lowest since June 1980, when the economy was near the end of a six-month recession.
DES MOINES, Iowa
IRS tightens rules on 403(b) plans
School teachers, college professors and hospital employees should keep an eye out for changes in their retirement plans this year. That’s because they are among the 10 million workers at nonprofit and educational organizations who may face fewer investment choices and tighter restrictions on how they can use the money in their retirement plans because of new IRS rules.
The IRS is requiring retirement plans designed for tax-exempt nonprofit groups and some public sector workers – called 403(b) plans – to comply with stricter rules. The IRS has allowed such plans to operate with less oversight than their for-profit world counterpart, the 401(k), for the last 40 years.
It’s a significant development because employers, which include school districts, religious groups and nonprofits with lean staffing, must take a more active role in managing their retirement plans.
WASHINGTON
Investors to buy IndyMac remains
A seven-member group of investors has agreed to buy the remnants of failed lender IndyMac Bank, a symbol of the housing boom and bust, for $13.9 billion, federal regulators said Friday.
IndyMac, which specialized in loans made with little down payment or proof of assets, was seized by the government in July after a run on the bank as the U.S. housing market collapsed.
The Federal Deposit Insurance Corp. said a holding company led by Steven Mnuchin, co-chief executive of private equity firm Dune Capital Management, agreed to buy IndyMac in a deal reached Wednesday and expected to close by early next month.
Once the deal closes, the investment group would pour $1.3 billion in new capital into IndyMac and continue to operate the Pasadena, Calif-based bank, the FDIC says.