Friday morning headlines

Stocks sharply lower: Strong downside reaction to the awful jobs report for May. Dow is down more than 200 points, putting it on the minus side for 2012.

Reaction to jobs report: Well, what do you think? Unlike previous months, there's virtually no silver lining to May's numbers. WSJ has a wrap-up of analysts comments.

Fed action?: Lots of speculation on whether the Federal Reserve will be compelled to launch a third round of bond purchases. The central bank meets next week. From Reuters:

"The missing ingredient preventing the Fed from action had been the equity market, but now we are seeing it softening," said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York. The Fed cut overnight interest rates to near zero in late 2008 and bought $2.3 trillion in bonds to try to spur a stronger recovery. It also has said it expect to keep rates "exceptionally low" through at least late 2014.

Workplace gets tougher: Longer hours, less pay, fewer benefits - California employees say that conditions have gotten worse in the last year, according to a USC-LAT poll. From the LAT:

It's a natural consequence of an economic downturn -- when layoffs occur, those left at work are asked to take on more responsibilities. They're loath to complain or leave because the unemployment rate is so high they fear they won't be able to find another job. The sluggishness of the economic recovery -- jobless numbers released Friday are expected to show another month of slow growth -- means that these conditions aren't likely to improve any time soon, economists say. When there's persistently high unemployment, employers don't have to pay big wage increases or improve conditions in order to keep you," said Heidi Shierholz, an economist with the Economic Policy Institute, who has not seen the poll data. "They don't have to give good packages to new workers when there's a queue around the block for every job."

Treasury yields at record low: The benchmark 10-year note has fallen below 1.5 percent for the first time ever. Investors are seeking the safety of government bonds.

Refi action picking up: That's what happens when rates are so low. The average on a 15-year fixed loan is 2.97 percent, down from 3.04 percent a week ago. It's the first time the rate has fallen below 3 percent. From the LAT:

With housing markets still troubled, the rates are mainly benefiting refinancers whose luck or self-discipline has left them with significant home equity. Purchase lending remains sluggish: The Mortgage Bankers Assn. says that fewer than a quarter of mortgages these days are used to buy homes. But the latest surge in refinancings caused the trade group last week to boost its projection for mortgage volume this year by nearly $200 billion, to $1.28 trillion.

Americans still buying cars: Chrysler sales were up 30 percent in May. Ford was up 13 percent and GM 11 percent. But customers had to be nudged. From Bloomberg:

Industrywide light-vehicle sales may have run at a 14.4 million seasonally adjusted annualized rate last month, the average of 14 estimates. Ford boosted incentives in May, Chrysler offered some buyers no monthly payments for 90 days and General Motors Co. offered discounts to try to offset market- share recovery by Japanese automakers, according to Peter Nesvold, a Jefferies & Co. analyst. Incentives are expected to play a larger role in May than in the past few months when pent-up demand drove consumers back to the market," Nesvold, who is based in New York, wrote yesterday in a research note.

Facebook update: Stock is back down - $27.85 at last check, or almost 6 percent.

Gas update: L.A.-area prices are falling, though not all that much given the big drops in the price of oil. An average gallon of regular in the L.A. area is $4.285, according to the Auto Club, about a nickel lower than last week.

Calpers slashes benefits in Vernon: Bruce Malkenhorst, a former administrator who has been receiving $545,000 a year, will see his yearly benefit drop to about $115,000. From the LAT:

The actions come after a lengthy audit by the California Public Employees Retirement System, which found Vernon improperly boosted the retirement benefits of nearly two dozen top employees. The agency also ruled that Vernon had erroneously awarded "public safety" pensions to Fresch and other staff attorneys. The Times first reported on the pensions in 2010. "It is an affront to the hundreds of thousands of public employees who rely on a modest CalPERS pension for a secure retirement. We fully intend to pursue recovery of all overpayments where we can," CalPERS Chief Executive Anne Stausboll said in a statement.