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Snuffysmith
Jan 9 2009, 08:14 AM
US Market

Economy

Snuffysmith
Jan 10 2009, 09:49 AM
US Market

Economy

Snuffysmith
Jan 12 2009, 08:25 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Smith Barney on the sales block. Citigroup (C) is in advanced talks to sell a controlling stake in its brokerage to Morgan Stanley (MS). The deal could provide Citi with a much-needed post-tax gain of $5B-$6B, though some decry Citi's choice of "selling out the future to get through the crisis of the present." Citi CEO Vikram Pandit had pledged not to sell the brokerage unit, Smith Barney, which has played a critical role in the company over the last decade. Paying $2B-$3B for a 51% stake (with an option to increase that stake in the future), Morgan Stanley would combine Smith Barney with its own brokerage unit in a $20B joint venture. The new firm would have around 22,000 brokers, creating the world's largest retail brokerage. A deal could be announced as early as this week.
  • Satyam rallies on hope. The Indian government replaced Satyam's (SAY) board and appointed three new directors. The computer company will have to restate its earnings and might be broken up into pieces after chairman Ramalinga Raju announced that over $1B on the company's balance sheet was fictitious. Raju and his younger brother Rama have been detained on charges including forgery, breach of trust and criminal conspiracy. Despite all the bad news, shares climbed 45% in India on hopes the government will craft some sort of rescue, or that the new board will come up with a workable plan.
  • Obama tries to navigate TARP trap. Members of Obama's administration are negotiating with lawmakers to avoid a messy fight over access to the second half of TARP funds. Obama has been considering whether President Bush should request permission to use the funds, with the goal of having the funds in place soon after Obama takes office on January 20. To address lawmakers' concerns, Obama's team has suggested using the funds for new purposes, including preventing foreclosures, and placing tougher conditions on recipients. If dissatisfied, Congress can deny the release of the funds, leaving Obama in a tricky political position.
  • Trying to ford the auto sales gap. Despite previous assurances to the contrary, Ford (F) may have to fall back on federal loans as a weakening economy threatens to drag domestic sales lower than the company expected. Ford had forecast 12.2M U.S. light vehicle sales this year, nearly 2M more than the annualized sales rate of the last three months. (In comparison, Chrysler expects sales may reach 11M units and General Motors (GM) forecasts a range of 10M-11M.) Ford told Congress last month that 2009 sales of 10M-10.5M units would trigger the need for up to $13B in loans. Analysts agree domestic sales will fall this year, with several estimates for 2009 sales in the 10M-11M range.
  • GM may ask for more money. Last week, General Motors (GM) said it had received enough money from the government to make it through a worst-case scenario and wouldn't need additional funds unless the economy worsens. It looks like GM has seen the economy sour in just the last few days, since CEO Rick Wagoner is now telling reporters the company may seek additional government loans beyond the $13.4B it has already been pledged. "The $13.4B is consistent with what we asked for through the first quarter under our downside market scenario, which is the way the market is running," said Wagoner, but in March, "we will obviously review the whole plan and at that point we'll see what requirements are."
  • China relaxes bad debt regulations. The China Banking Regulatory Commission will allow bad debt to increase this year as it softens the rules of bank lending to revive the Chinese economy. After five years of declines, the Commission will drop its target of reducing the balance and ratio of bad loans. The looser requirements may help lending, but also raise concerns about a surge in bad loans just four years after China spent over $500B cleaning up its banking system.
  • U.K. wants to stem bankruptcies. The U.K. is in the early stages of considering a plan that would set up a fund aimed at preventing corporate defaults. Sources say officials are looking at different structures for the plan, including one where struggling companies would give the fund equity in return for the fund assuming debt owed to banks. The goal is to prevent further bankruptcies and job losses as the U.K. economy continues to weaken. Several other efforts to bolster the economy are also under consideration.
  • Payrolls drop. The government released data on Nonfarm Payrolls on Friday, showing a fall of 524,000 in December, in line with the 525,000 drop economists expected. Unemployment jumped to 7.2% from 6.7%, vs. 7% consensus - its highest level since January 1993. October and November were revised, with another 150K jobs lost. "This will be a big hit to consumer spending and confidence," says one economist. "It suggests a very long, challenging recession."
Snuffysmith
Jan 12 2009, 08:26 AM
US Market

Economy

Snuffysmith
Jan 13 2009, 07:52 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Bush, Obama ask for TARP's part II. Pres. Bush has requested the second half of TARP funds from Congress, after being asked to do so by Obama. Worried about a 'still fragile' economy, Obama felt "it would be irresponsible for me... to enter into the administration without any potential ammunition should there be some sort of emergency or weakening of the financial system." Obama's team is already working to satisfy the concerns of lawmakers on the use of TARP funds, as many Republicans and some Democrats are expected to oppose releasing the money. A vote could come as early as Friday.
  • Satyam shakedown continues. After gaining nearly 45% in India yesterday on hopes of a government rescue, Satyam (SAY) shares are falling again as reality sinks in (-9.2% as of 5:30 ET). The new government-appointed board acknowledged it would take time to get the company back on track, and said one of its top priorities is appointing an independent accountant. In the meantime, non-Indian computer-service providers like IBM (IBM) and Accenture (ACN) are in a stronger position to pick up new contracts as investors worry about India's corporate governance.
  • Elan considers merger, sale. Drugmaker Elan (ELN) has hired Citigroup Global Markets (C) to review the company's strategic options, including a possible merger or sale. Elan's shares lost 72% last year on concerns about its ability to pay back $1.15B in debt and the safety of its Tysabri multiple sclerosis drug, and then gained over 25% last week on rumors, later proved to be untrue, that the company was in talks with Pfizer (PFE). Shares +10.6% in Ireland (5:30 ET).
  • Spain opens Madoff probe. Spanish prosecutors are investigating how Banco Santander (STD), Europe's second-largest bank, managed to lose €2.3B ($3.1B) of its clients' money by investing with Madoff. Two-thirds of the losses came from the Latin America, a market where Santander does almost a third of its business and wants to expand. Santander itself lost just €17M. Officials are trying to find out what exactly was the nature of Santander's relationship with Madoff's firm, and when the bank first realized there were any problems with the investments. Until this scandal, Santander had provided a rare beacon of stability in otherwise tumultuous financial markets.
  • RBS cashing out of China? Royal Bank of Scotland (RBS) is said to be selling a stake in Bank of China Ltd. With an 8.25% holding, RBS is Bank of China's second largest shareholder. The move would follow the leads of UBS (UBS), which cashed out its 1.6% stake in Bank of China at the end of December, and Bank of America (BAC), which last week sold $2.8B of shares in China Construction Bank (previously I, II). Details of the sale could be announced as early as today.
  • AIG asset sales. Sources say AIG (AIG) is in talks to sell its Canadian life insurance unit to Bank of Montreal (BMO). An agreement could be reached as soon as today.
  • Infosys sees record profits. Infosys (INFY), India’s second-largest computer-services provider, posted record Q3 profits as more companies turned to outsourcing to cut their costs. The company stands to win additional orders as clients defect from rivals Satyam (SAY) and Wipro (WIT). Net income rose 33%, the fastest rate in six quarters, reaching 16.4B rupees ($336M) vs. 15.4B consensus. (more details below)
  • U.K. reaches for bailout #2. The U.K. government is getting ready to roll out another giant bailout plan totaling billions of pounds, aimed at saving companies and jobs. Sources say the plan could be announced in the next ten days, or possibly as soon as tomorrow. The U.K. economic outlook has continued to deteriorate rapidly, despite a £500B ($758B) bailout package already in place.
  • German stimulus grows. In its second attempt to address Germany's worst recession since World War II, Angela Merkel's coalition agreed last night to spend an extra €50B ($66B) over two years to help the economy. The plan includes measures such as lowering health insurance payments, investing in schools and roads, reducing the lowest income-tax rate and €100 checks for each child. "If we’d failed to do what we did last night, we’d have risked the collapse of parts of our industrial base...," said one lawmaker. "We’re in an exceptional situation.
Snuffysmith
Jan 13 2009, 07:53 AM
Economy

Snuffysmith
Jan 14 2009, 10:35 AM
Economy

Snuffysmith
Jan 14 2009, 10:43 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Morgan Stanley Smith Barney. Citigroup (C) and Morgan Stanley (MS) confirmed they're merging their wealth management units into Morgan Stanley Smith Barney. Morgan will pay $2.7B for a 51% stake with the option of taking full control after five years. Citi will book a pre-tax gain of $9.5B, and an after-tax gain of $5.8B. The joint venture will employ 20,390 brokers in over 1,000 firms, surpassing the 16,000-strong 'thundering herd' of brokers that Bank of America (BAC) acquired in Merrill Lynch. However, some question the timing of the deal, wondering if creating the largest group of financial advisers is prudent when many investors and brokers are shying away from Wall Street giants and analysts expect a resurgence of 'boutique' brokerage firms.
  • Citi keeps shrinking. Citigroup's (C) deal with Morgan Stanley (MS) is just one part of its radical restructuring operation. Abandoning the much-touted 'financial supermarket,' sources say Citi is preparing to break the mega-bank into investment and commercial units, essentially dismantling the 1998 merger between Citicorp and Travelers that created Citigroup. It will jettison several business units and scale down its proprietary trading, shrinking itself by about a third and focusing on large corporations and wealthy individuals instead of less-affluent customers. Sources say the changes will be unveiled when Citi released Q4 earnings next week. Citigroup declined to comment.
  • Bernanke backs new efforts for toxic assets. In a speech at the London School of Economics yesterday, the Fed's Bernanke threw his support behind a big U.S. stimulus plan, saying "a substantial fiscal package... could provide a significant boost to economic activity." However, he also said that Obama's plan is 'unlikely' to revive growth on its own without 'a comprehensive plan to stabilize the financial system and restore normal flows of credit.' To that end, he raised three options for Obama's Treasury in the event that it actually decides to address troubled assets with TARP money: 1) public purchases of troubled assets, as previously proposed by Paulson, 2) government provision of asset guarantees in return for warrants, or 3) creating and capitalizing 'bad banks' that would purchase assets from financial institutions in exchange for cash and equity in them. (Read the full text of Bernanke's speech)
  • HSBC at risk. Shares of HSBC (HBC) fell 7.3% in London after analysts at Morgan Stanley said Europe's largest bank may be forced to raise up to $30B and cut its dividend in half. Unlike most rivals, HSBC has not had to raise capital during the financial crisis, but the analysts warned its capital position has eroded: "Historically, HSBC has carried about 120 basis points of surplus capital at the group level - this has now all but gone at a time when we think it better for the buffer to have increased," they said, adding it now has "one of the weaker capital ratios in Europe and the second weakest in Asia."
  • Yahoo turns to Bartz for rescue. Yahoo (YHOO) named Carol Bartz its new CEO, as expected, and announced that President Sue Decker is resigning. Talking up Bartz, chairman Roy Bostock said "she is the exact combination of seasoned technology executive and savvy leader that the board was looking for." Not everyone agrees. Bartz's appointment is largely viewed by Wall Street as safe but unspectacular, and some worry about her lack of professional experience with internet companies and online advertising. Known as a tough-talking straight-shooter, Bartz will be under immediate pressure from investors who have watched Yahoo's share price erode over the last year. Bartz was previously executive chairwoman of Autodesk (ADSK) and had served as its CEO for 14 years.
  • Deutsche's major Q4 loss. Deutsche Bank (DB) warned of a loss of roughly €4.8B ($6.4B) in Q4 vs. profits of around €1B a year earlier. Germany's biggest bank, Deutsche lost around $1B on bad bets involving CDS-hedged bonds, and another $500M trading equities. CEO Josef Ackermann released a statement Deutsche Bank has "scaled back or exited trading strategies most affected by market turbulence." The bank cited 'exceptional market conditions' for its poor performance, notably in credit trading, equity derivatives and equities proprietary trading. Its official Q4 FY '08 earnings report is due Feb. 5. Shares -11% premarket (7:00 ET).
  • Quotables. "I’ve never quite been in this situation before of getting a massive pay cut, no bonus, no longer allowed to stay in decent hotels, no corporate airplane," complained Bob Lutz, General Motor’s (GM) Vice Chairman. "I have to stand in line at the Northwest counter. I’ve never quite experienced this before." Poor guy.
  • Barclays lays off workers, again. Barclays (BCS) is cutting around 2,100 jobs globally in its investment banking and money management units. The bank had built these units aggressively over the last five years but now says it wants to be 'appropriately sized, given the current market conditions.' The move will likely raise speculation about further cost-cutting in Barclays' retail and corporate banking division. Shares -14% premarket (7:00 ET).
  • RBS sells China stake. In line with yesterday's whispers from unnamed sources, Royal Bank of Scotland (RBS) confirmed it has sold its 4.26% equity stake in Bank of China for around $2.3B. "The decision to sell the stake forms part of the ongoing strategic review of the group's businesses announced in October," RBS said in a statement.
  • U.S. keeps its Triple-A. S&P affirmed its AAA rating for the U.S., but said risks to the country's top sovereign rating have increased "noticeably" since September. S&P's "reasonable worst-case scenario" sees net general government debt rising from its 2008 level of 42% of GDP to as much as 75% by 2011. On the plus side, S&P said U.S. strengths include one of the most flexible economies of any nation and the fact the U.S. dollar is one of the world's most used currencies.
  • Retail sales drop. Retail chain store sales fell 2.3% from a week ago, ICSC reported, and fell 2.2% Y/Y. "A seasonal weakening in traffic, less gift-card redemption and adverse weather all came together to weaken demand sharply for the first full week of 2009." Redbook reported a 2.3% decline in the first week of January vs. the previous month, while sales were down 1.9% Y/Y.
  • Budget deficit balloons. The U.S. Budget Deficit swelled to a record $485B in FQ1, compared to a deficit of $455B for all of fiscal 2008. December's budget shortfall was $83.6B, vs. a $48.3B surplus a year ago. Congressional estimators project an unparalleled deficit of $1.2T for 2009, not including any Obama stimulus.
  • Consumer confidence? What's that? A whopping 65% of Americans now rate the economy as 'poor,' a record in 23 years of weekly polls, according to ABC News. Another 29% say it's 'not so good' for a net negative rating of 94% - matching the all-time high. ABC's Consumer Comfort Index remains at a dismal -49.
  • Trade balance. November's Trade Balance of -$40.4B, down from October's -$56.7B, was less than economists' $51B forecast. Exports: $142B (-$8.7B); imports: $183B (-$26B). For now, the global slowdown is crimping U.S. demand for exports more than it is foreign demand for U.S. products.
Snuffysmith
Jan 15 2009, 10:36 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • BoA gets another handout. Bank of America (BAC) is close to finalizing a deal in which the government will provide billions of dollars in aid to help the bank close its Merrill Lynch acquisition. BoA approached the Treasury in mid-December, sources say, warning that Merrill's larger-than-expected Q4 losses posed a problem in the acquisition process. Concerned the deal's failure would further hurt shaky financial markets, the Treasury agreed to help create a plan including additional funds from TARP. (BoA has already received $25B in federal rescue funds.) Details are still being finalized, and an announcement is expected on Tuesday when BoA reports quarterly earnings.
  • Apple's Jobs loss. Apple (AAPL) shares plunged over 7% in after hours trading yesterday on the surprise announcement that CEO Steve Jobs will take a medical leave until June. Only nine days ago, Jobs reluctantly released a public letter saying he had a non-life-threatening hormone imbalance and would continue in his role as CEO as he recovered. In a new, cryptic letter, Jobs called his health problems 'more complex than I originally thought.' COO Tim Cook, respected in the company for his expertise, will take over day-to-day operations. This is his second time at the helm of the company, having taken over when Jobs underwent cancer treatment in 2004. Many investors and analysts are worried Jobs' absence will hurt the company at a time when it's struggling to find the next big thing, though others believe Apple is sufficiently innovative and well-placed in the market to continue without its famed leader. The company will likely face several lawsuits from investors angered over Jobs failure to fully disclose his health problems.
  • Fund custodians under fire for Madoff losses. HSBC (HBC) and UBS (UBS) are potentially facing liabilities of up to $3.2B as the financial custodians of funds in Luxembourg and Ireland with Madoff-related losses. As custodians, the two banks were charged with overseeing the funds and managing cash inflows and payments to investors. A lawyer representing 10 French retail investors and two institutions that face Madoff-related losses at Luxembourg funds said "UBS didn’t do its job of knowing at all times where the assets were, and the same with HSBC," a failure of duty lawyers will have to prove to recoup investor money. The legal firm representing both HSBC and UBS said the funds were created by investors specifically looking to place money with Madoff, and as such the custodian had only 'a very, very, very small role to play.'
  • Lilly reaches drug settlement. Eli Lilly (LLY) agreed to a $1.42B settlement over criminal and civil charges that it illegally marketed Zyprexa, its blockbuster antipsychotic drug, for unauthorized patient use. Lilly was accused of pressing doctors for years to prescribe Zyprexa for children and the elderly, two groups for whom the drug is not federally approved and poses extra risks. Anticipating a settlement last fall, the company set aside $1.4B for that purpose. Lilly will also plead guilty to one misdemeanor violation of the Food, Drug, and Cosmetic Act.
  • Black report from Beige Book. Overall economic activity has continued to weaken across nearly all of the Federal Reserve districts, according to the Fed's Beige Book. Retail sales were generally negative, manufacturing decreased, construction weakened, lending remained tight and the labor market continued to soften. As if the report weren't already sufficiently depressing, the Fed noted that a 'substantial number of job reductions in the financial sector have yet to show up in payroll statistics.' (Read the full report)
  • Bartz searches for right MSFT approach. With Bartz as its new CEO, Yahoo (YHOO) is several steps closer to a search deal with Microsoft (MSFT), though sources from both companies said a deal is unlikely to be imminent. In a company-wide meeting, Bartz said she plans to spend considerable time researching whether to sell Yahoo's search business, but added that her 'gut' was to hold on to the business. Although Bartz's appointment is seen as a fresh start for the company, Microsoft is busy dealing with other problems, including cost cutting, that could get in the way of a sale or partnership.
  • Mortgage apps surge. Mortgage applications jumped 15.8% last week, MBA reported, as record-low interest rates spurred a 25.6% increase in refinances from the previous week. Refinances now account for 85.3% of all applications, up from 79.8%. The Average 30-year mortgage rate dropped to 4.89% from 5.07%.
  • Despite mortgage mods, foreclosures soar. Foreclosure filings jumped 81% in 2008 to 3.2M, RealtyTrac says, with one in every 54 U.S. households getting at least one foreclosure notice. "Clearly the foreclosure prevention programs implemented to date have not had any real success in slowing down this foreclosure tsunami," RealtyTrac's CEO James Saccacio said. Activity did slow by 4% in Q4, but jumped 17% in December from November - another signal mortgage moderations helped to temporarily slow, but not stop, foreclosures. On Wednesday, Foreclosures.com reported a 63.5% jump in foreclosures.
  • Retail sales fall. Retail sales fell 2.7% from November to $343.2B, according to the Census Bureau, and were 9.8% lower than a year ago. Consensus was for -1.2% M/M. Excluding auto sales, December was -3.1% M/M vs. estimates of -1.3%. "We finally saw confirmation of our original expectations that holiday retail spending would prove acutely weak, though even we underestimated the degree of weakness," one economist says of the larger than expected drop in retail sales. "Bad ugly and worse," says another.
  • Import/export prices. Import prices declined 4.2% in December from a month earlier, the fifth straight down month, vs. consensus of -5.3%. Export prices also fell for the fifth consecutive month, declining 2.3%. Import prices -9.3% on the year (fueled by a 47% drop in petroleum); exports -3.2%.
Snuffysmith
Jan 15 2009, 10:50 AM
Snuffysmith
Jan 16 2009, 05:41 PM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Dems showcase stimulus package. House Democrats unveiled an unprecedented $825B stimulus plan yesterday, divided into two-thirds spending and one-third tax cuts. Virtually everyone in the country would be affected by the package: 95% of workers would get a $500 tax cut or $1,000 cut for working couples; first-time home buyers between Jan. 1 and June 30 would get a $7,500 tax credit; local school districts would get $120B as local government budgets collapse; and states would get $87B for their Medicaid budgets. Among other sectors that would get stimulus money: food stamps, infrastructure, renewable energy, and state and local law enforcement. For all the targeted spending, however, there's still some pork attached to the bill, including funds to put fresh sod on the National Mall and millions of $40 coupons to help Americans adapt old their old TVs for digital signals.
  • Mixed responses on stimulus. Obama praised the House Democrats' stimulus package for its ability to help "make America strong and competitive in the 21st century." Republicans were less than thrilled, and House Republican leader John Boehner was appalled that "my Democratic colleagues think they can borrow and spend their way back to prosperity." Economists were largely mixed on the issue. Despite the unprecedented size of the proposed stimulus plan, some economists worry it's still not large enough. Others believe the package is large enough but disagree on how the money should be spent. Still others suggest the stimulus will be effective in supporting an eventual recovery, but not necessarily at halting the current decline, because most of the plan's measures won't come into effect until late 2009 and into 2010.
  • Obama escapes TARP trap. Obama won a key legislative test yesterday when the Senate voted to release the second half of TARP funds, voting 52-42 against a resolution that would have prevented access to the $350B. Obama acknowledged the 'frustration' felt over how the first half of TARP funds were used, and promised to set tougher restrictions on the money, including capping executive pay, requiring banks to lend more and ensuring transparency and accountability. He also pledged to spend $50B-$100B on a 'sweeping' foreclosure-prevention effort.
  • Tank of America. Bank of America (BAC) secured an extra $20B from the government, bringing the total to $45B, and $118B of its assets will be backstopped by the Treasury and FDIC. Most of the assets guaranteed by the government are from Merrill Lynch. In exchange, taxpayers will get $4B in preferred stock with a 8% yield and warrants, BoA will cut its dividend to $0.01, and the bank agreed to a mortgage modification program. Meanwhile, shareholders are livid that CEO Ken Lewis didn't know how bad things were with Merrill prior to their Sept. 15 merger deal, and didn't disclose the problems prior to their Dec. 5 vote on the deal, or before its Jan. 1 closing. (Read the official statement and term sheet (.pdf))
  • Citigroup to reorganize into two units after $8B loss. Citigroup (C) posted a Q4 net loss of $8.29B, compared with a prior-year loss of $9.83B. Revenue fell 13% to $5.6B (see more numbers below). Citigroup said it will reorganize into Citicorp and Citi Holdings: The former will focus on Citi's global universal bank in more than 100 countries, while the latter will be made up of brokerage and retail asset management, local consumer finance and a special asset pool - with its management focused on "tightly managing risks and losses." Citi said it will make the transition to two companies as quickly as possible, and is already looking for someone to head up Citi Holdings (Paulson?). Shares are up 15% premarket, but have shed 43% this month alone.
  • BofA swings to loss, exacerbated by Merrill. Bank of America (BAC) swung to a Q4 loss of $1.79B - its first in 17 years - compared with a profit of $268M a year ago. Revenue increased 19% to $15.98B (more numbers below). Credit-loss provisions nearly tripled to $8.54B. BofA disclosed a preliminary Q4 loss at Merrill Lynch of $15.31B, demonstrating why it was so desperate for more government assistance (see above). For the first time, BofA revealed how much credit it extended - $155B in Q4, with $49B for commercial non-real estate and $45B for mortgages - and said it's beefing up its mortgage operations to meet surging demand as lending rates fall to historic lows.
  • Chrysler Financial wants money too. With government money pouring out right and left, Chrysler is back in the news. The company's credit arm, Chrysler Financial, wants $1.5B from the bank bailout fund to increase loans to car buyers and help prop up dismal sales. Chrysler Financial has stepped up its appeals since GMAC (GKM), jointly owned by General Motors (GM) and Cerberus, became a bank holding company and received $6B in government aid. A spokeswoman said Chrysler Financial's application "is still pending, but we are optimistic we will receive the necessary support from the Treasury."
  • Cuomo gets in on Madoff inquiry. New York Attorney General Andrew Cuomo has opened an investigation into the Madoff scam and has issued subpoenas to determine if financier Ezra Merkin defrauded universities and charities when he invested their money with Madoff. Cuomo is seeking information from Merkin, three investment funds he operated and 15 non-profits that gave him money to manage. Cuomo's involvement is seen as a welcome development by many investors, as New York law gives the AG broad subpoena powers and has a very broad definition of fraud.
  • Freddie evictions during foreclosure halt. Freddie Mac (FRE) is moving forward with legal action to evict tenants from foreclosed properties, raising ire amongst tenants and legal groups who say the moves violate the spirit of the moratorium that Freddie agreed to in November. A spokesman for the mortgage lender said that Freddie has suspended sales of foreclosed properties and isn't locking people out of their homes, but is still pursuing existing court cases and initiating new ones against homeowners. Freddie is also still filing eviction proceedings against renters. The mixed messages of a simultaneously calling a halt to foreclosures while proceeding with some cases is creating 'immense fear, stress and instability' among homeowners and renters.
  • ECB rate cut. The ECB cut its key rate by 50 basis points to 2%, as expected. The next important ECB meeting will be in March, said Trichet, downplaying the chance of a February cut. Trichet said inflation could pick up after mid-year.
  • PPI falls. Producer Price Index -1.9% in December from a month ago, vs. consensus of -2%. Core PPI +0.2% vs. 0.1% consensus. Year-over-year Core PPI +4.3% vs. +4.1% consensus. Takeaway: producer prices fell less than expected, but not radically so.
  • NY survey near record lows. The Empire State Manufacturing survey showed NY manufacturing deteriorated in January. Business conditions, new orders and shipments stayed near record lows. Forward-looking indicators fell below zero for the first time in the survey's history.
  • Mixed report from Philly Fed. Philly Fed's Business Outlook ticked up to -24.3 from December's -36.1 and -35 consensus. New orders and shipments inched up, but unfilled orders and delivery times edged lower. Employment losses were substantial. In short, the report was better than expected, but hardly encouraging.
  • Jobless claims tick up. Initial Jobless Claims rose to 524,000 last week, up 54K from last week's 470K (revised), and worse than the 500K economists predicted. The 4-week moving average of 518,500 is down 8K. "If there's any silver lining, it's that while the employment situation is sluggish, nothing points to intensification," said strategist Craig Peckham.
  • Consumers see bleak present, hopeful future. RBC showed consumer sentiment at a six-year low, with its CASH index dropping to 13.3 from 15.3 in December. Despite the gloom, expectations ticked higher, suggesting "hope for the future under the new administration, although the outlook is clearly cautious." The RBC CASH poll (.pdf) asked "Would you say things in this country are heading in the right direction, or are they off on the wrong track?" 32% say right; 59% say wrong. But only 11% see the economy "much weaker" six months out.
Snuffysmith
Jan 16 2009, 05:43 PM

Business / Economy: As Demand Falls, So Do Wholesale Prices
By JACK HEALY
The report showing the fifth straight month of declining
wholesale prices raised fears of persistent deflation.

Full Story:
http://www.nytimes.com/2009/01/16/business...amp;tntemail1=y

Snuffysmith
Jan 16 2009, 05:55 PM
Snuffysmith
Jan 18 2009, 08:22 AM
Snuffysmith
Jan 19 2009, 10:20 AM
Snuffysmith
Jan 20 2009, 01:04 AM
U.S. stimulus not enough, TARP bailout misused: Soros

  • Reuters
  • 01/19/2009 08:24 PM
Obama team consider new ‘bad bank’

  • FT
  • 01/19/2009 08:22 PM
UK unveils second bank rescue

  • FT
  • 01/19/2009 05:46 AM
Cost of Borrowing Zooms Up for Corporations

  • NY Times
  • 01/19/2009 05:30 AM
Obama Advisers Say They Will Aim TARP Funds at Widening Credit

  • Bloomberg
  • 01/19/2009 05:28 AM
Snuffysmith
Jan 21 2009, 08:38 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • New prez, new banking plan. President Obama's economic team is rushing to complete a bank-rescue plan that can be twinned with the $825B stimulus package working its way through Congress. Details are still sketchy, but the plan will likely include $50B+ to stem foreclosures, new capital injections for banks and efforts to deal with toxic assets, possibly through the combination of a 'bad bank' and government guarantees. In his inaugural speech, Obama called for 'bold and swift' action to resolve the crisis that cost the U.S. nearly 2.6M jobs last year. Shares of U.S. banks fell around 20% as some investors feared the government might ultimately need to nationalize the hardest hit financial institutions.
  • Geithner grill. Tim Geithner, Obama's pick for Treasury, will be grilled in Congress today on issues ranging from his past tax troubles to his solutions for fixing ailing financial markets. Still, despite Geithner's late payment of almost $50,000 in federal taxes and penalties, even critics concede his experience and ability. In prepared remarks, Geithner calls for 'reform' of TARP to help small businesses and families that are losing their homes and jobs, and says "the ultimate costs of this crisis will be greater if we do not act with sufficient strength now. In a crisis of this magnitude, the most prudent course is the most forceful course." The Finance Committee will vote on his nomination tomorrow.
  • Fiat deal needs federal aid. Fiat announced plans yesterday to take a 35% equity stake in Chrysler in exchange for access to Fiat technology. The deal is not yet final, however, because it's contingent on Chrysler getting an extra $3B from the government. A Chrysler spokeswoman said the $3B in loans is necessary for the company's viability. Assuming the government coughs up the extra money, the deal still presents several challenges. The linkup between the two companies is likely to be loose, without the full synergies of a merger, and Fiat's side of the deal may be cash-free but certainly isn't risk-free. A continued Chrysler slump could cost Fiat money, time and energy it can't afford to waste.
  • BHP closes mine, cuts jobs. Mining giant BHP Billiton (BHP) will cut 6,000 jobs and close a major nickel mine in Australia with a write-off of $1.6B. BHP had set itself apart from other miners recently by maintaining its production levels but a continued slide in commodity prices has forced the company's hand on job cuts and mine closures. CFO Alex Vanselow warned more mines could be closed and open mines could reduce output.
  • IBM sees sunny '09. IBM (IBM) posted better-than-expected Q4 earnings (more details below) and, unlike many of its high-tech rivals, forecasts a rosy 2009. Acknowledging the 'extremely difficult economic environment,' IBM expects continued benefits from growing profitability on its software and services businesses. IBM said customers are continuing to sign up for outsourcing and other services contracts despite the global slowdown. According to CEO Samuel J. Palmisano, the company is 'ahead of pace on our roadmap for $10 to $11 per share' in 2010.
  • Sony's Stringer battles 'old guard.' Tensions are rising at Sony (SNE) over a sweeping restructuring plan announced in December, with details of the plan expected to be announced today or tomorrow. Chairman and CEO Sir Howard Stringer is at odds with an 'old guard' of managers in the company's electronics division. Sources say Stringer wants to cut 16,000 jobs and undergo massive restructuring but has met with resistance. Much of the dispute centers on where the job cuts will fall and in which areas Sony should cut its production costs and rely more on sales of software built into its gadgets.
  • SEC wants its Apple a day. Sources say the SEC has opened a review of Apple (AAPL) over its (non)disclosures of CEO Steve Jobs' health. A review doesn't necessarily mean the commission sees evidence of wrongdoing, and to bring a case the SEC would probably have to show the company tried to benefit by withholding information about an unambiguous diagnosis. An Apple spokesman declined to comment.
  • Citi's penny payments. Citigroup (C) cut its common stock dividend to $0.01 from $0.16 as required by the government bailout it received in November. The dividend cut will save the company around $817.5M per quarter.
  • French bank aid. The French government will provide another €10.5B ($13.6B) in aid to the country's biggest lenders. In exchange, top execs will have to forgo bonuses.
Snuffysmith
Jan 21 2009, 08:38 AM
Snuffysmith
Jan 22 2009, 10:01 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Shareholder sues BoA. A Bank of America (BAC) shareholder has filed a legal suit against the company, seeking class action status on behalf of all shareholders eligible to vote on the acquisition of Merrill Lynch. The suit names Kenneth Lewis and John Thain as defendants and faults the two for failing to disclose the full extent of Merrill's losses; the Dec. 5 vote to approve the merger was based on an Oct. 31 proxy statement that hadn't been revised to reflect Merrill's poor Q4 performance.
  • Sony slips. Sony (SNE) warned it will post a ¥260B ($2.9B) annual operating loss on falling demand, a strengthening yen and restructuring costs. The forecast is down from an earlier projection of a ¥200B profit, and far worse than earlier consensus estimates of a ¥100B loss. It will be Sony's first operating loss in 14 years, and its biggest loss ever, as the company has fallen behind Apple (AAPL) in portable music, Nintendo (NTDOY.PK) in video games and is losing money on its flat screen TVs. As part of the restructuring plan, Sony said it may consolidate TV production in Japan into one plant, but analysts call for more drastic steps to turn the company around. Shares -2.8% in Japan (7:00 ET).
  • Rescue buyout for Satyam? Media reports say Indian firm Larsen & Toubro, which holds around a 4% stake in Satyam (SAY), is considering presenting a rescue plan to Satyam's board. Investment banking and government sources said L&T would put a price on its bid once KPMG and Deloitte, Satyam's new auditors, release updated audit results. L&T denied the reports. Satyam's board will being a two-day meeting today to discuss how to secure emergency funding.
  • AIG selling prized business. AIG (AIG) has begun the sale of its prized Asian life insurance unit, and hopes to pull in as much as $20B on the unit to help repay its government loans. The unit boasts 20M policyholders across 13 countries, employs 200,000 tied agents and last year made an aggregate operating profit of around $2B. AIG has expressed an interest in selling 49% unit, but would consider a complete sale, and could be willing to accept shares as acquisition currency. Potential bidders include HSBC (HBC), Prudential Financial (PRU) and China Life (LFC).
  • Apple regains some shine. Apple (AAPL) posted better-than-expected quarterly earnings yesterday (more details below), giving depressed shares a healthy boost with gains of over 8% after hours. Overseas demand for iPods, Mac computers and iPhones offset a slowdown in U.S. sales, pushing quarterly sales past $10B for the first time vs. consensus estimates of the first profit drop in five years. The company posted a cautious outlook for FQ2, forecasting EPS of $0.90-1.00 vs. $1.13 consensus and revenue of $7.6-8B vs. $8.2B.
  • Germany's 'Bad Bank Light.' The German government is working on a new 'Bad Bank Light' rescue plan that could help the industry get hundreds of billions of euros of bad assets off its books. According to media reports, the government would take on the bad assets of banks and absorb associated losses, and would also get a claim on future gains. A similar model was successfully used with East German banks after reunification in 1990. The government could take as much as €300B-€400B in bad assets, though the banks themselves would choose which assets to divest.
  • BoJ forecasts deflation. Bank of Japan voted unanimously to maintain interest rates at 0.1%, and lowered its assessment of the economy. BoJ now sees a longer contraction until recovery starts to kick in by the second half of fiscal 2010. Japan will slip back into deflation during the contraction.
  • Retail sales. Retail chain store sales rose 1.1% from a week ago, ICSC reported, and fell 1.8% Y/Y. "Being a low volume month with little incentive to spend will continue to make January a tough month for retailers." According to Redbook, national chain store sales fell 2.5% in the first two weeks of January, worse than the expected -2.2%, noting retailers don't tend to read too much into January. Shops are building very cautious inventories for the spring season.
  • Housing index drops. NAHB's Housing Market Index came in at a record low of 8 vs. 9 consensus. However its index of prospective buyers rose to 8 vs. 7 in December, while its index of home sales for the next six months inched up to 17 from 16. "Clearly, conditions in the nation's housing market aren't getting any better," said NAHB chairman Sandy Dunn, "and they aren't going to get any better until the federal government takes substantial action to encourage qualified buyers to get back in the market."
Snuffysmith
Jan 22 2009, 10:06 AM
Snuffysmith
Jan 23 2009, 01:13 AM

 Roubini, Edwards predict possible 40% slump in S&P 500
BHP Billiton to cut 6,000 jobs
Japan Exports Plummet Record 35%, Signaling Job Cuts
BoJ holds rates unchanged; sees deflation ahead
Borrowers falling behind putting stress on banks
Pound Slumps to Record Versus Yen; Rogers Says U.K. ‘Finished’
Economists predict continuing economic gloom for U.S. during next 4 years
Investors Dump Shares As Banking Fears Mount
America’s banks need to hold a yard sale
SoCal home price drops nearly 35 percent
Japan Government Says Economy Is ‘Worsening Rapidly’
China Faces Worst Unemployment in Decades as Slowdown Deepens
Roubini Predicts U.S. Losses May Reach $3.6 Trillion
Real recovery won't be anytime soon
Cost of Borrowing Zooms Up for Corporations
The rescue has failed: it's time to fess up, reboot and start again
Unless we are decisive Britain faces bankruptcy
Monetary union has left half of Europe trapped in depression
The End of Banking as We Know It
Warning that house prices may fall by 80%
Crunch 'cost Arabs $2.5 trillion'
Europe's Biggest Car Terminal Bursting at the Seams
$350 million ... gone
California faces insolvency, governor warns
Snuffysmith
Jan 23 2009, 09:15 AM
Geithner Pledges `Dramatic,' Prolonged Effort to Stabilize Banking System Timothy Geithner, President Barack Obama’s nominee for Treasury secretary, pledged an expanded and prolonged government role in everything from stabilizing banks to ensuring credit for small businesses.

Fed Balance-Sheet Assets Drop to $2.04 Trillion as Loans to Banks Decline The value of the Federal Reserve’s balance sheet fell by $16.6 billion to $2.04 trillion over the past week as discount-window loans to commercial banks declined.

Richmond Fed's Lacker Says Idea of Creating a `Bad Bank' is `Compelling' Richmond Federal Reserve Bank President Jeffrey Lacker said moving lenders’ tainted assets into a government bank is a “compelling” idea that could revive private investment in the U.S. banking system.

Snuffysmith
Jan 26 2009, 12:36 PM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Wyeth, Pfizer reach deal. Wyeth (WYE) has agreed to be acquired by rival Pfizer (PFE) for $68B. Wyeth shareholders will get $50.19 per share in a stock-cash combo, a 29% premium to Wyeth's trading price before talks became public. The largest pharmaceutical deal in almost ten years, Pfizer will borrow $22.5B to finance the acquisition and will cut its quarterly dividend to $0.16/share. Pfizer CEO Jeffrey Kindler will lead the combined behemoth of a company which will have 130,000 employees and annual revenue 55% higher than GlaxoSmithKline (GSK), the world's second-largest drugmaker. Premarket: WYE +6.2%, PFE -4.2% (7:00 ET). (See below for Pfizer and Wyeth earnings, released today)
  • Barclays balances writedowns with growth. Barclays (BCS) wrote down around £8B ($11B) of credit assets in 2008, and said 'record revenue' will cover writedowns and the bank won't raise additional capital. Barclays pointed to its investment bank and Lehman Brothers Holdings North American assets acquired last year as strong profit drivers. The bank has £17B more than regulators' capital requirement. Trying to calm investor concerns after a sharp drop in stock price this month, Barclays has advanced its earning release to Feb. 9 from Feb. 17. Shares +51.5% premarket (7:00 ET).
  • Pressures rise for auto dealers, parts suppliers. Chrysler is pressuring dealers to accept cost cuts, reduce profit margins and refrain from slashing orders for new vehicles despite a forecasted slump in sales. "Dealers understand the need for all parties to put some skin in the game," said Chrysler Vice Chairman Jim Press, as the car companies rush to meet a March 31 deadline to prove their viability. Meanwhile, several auto parts suppliers are preparing for possible bankruptcy, including Visteon Corp. (VC), one of Ford's (F) largest parts suppliers. Some analysts worry the industry may be headed for mass liquidations as auto companies scale back production, and lobbying efforts are growing for the industry to secure at least $10B of TARP aid.
  • Skipping out on Skype? Speculation is growing that eBay (EBAY) is getting ready to sell its Skype internet telephone division if it gets a substantial bid. Industry insiders point to comments by CEO John Donahue who called Skype a 'great stand-alone business' and admitted 'the synergies between Skype and the other parts of our portfolio are minimal.' eBay bought Skype in 2005 for $2.6B but has since admitted that it vastly overpaid for the business. Potential buyers could include Google (GOOG), AT&T (T) or Verizon (VZ).
  • Losses sting at ING. ING Group (ING) will post a €3.3B ($4.27B) underlying loss for Q4, including €2B in losses from its structured credit portfolio, after what it called the worst quarter for equity and credit markets in over half a century. This is its second consecutive quarterly loss. The Dutch financial group will tap into €22B of Dutch state loan guarantees for its ailing portfolio, and will cut 7,000 jobs to save €1B of costs in 2009. CEO Michel Tilmant will step down, to be replaced by Board Chairman Jan Hommen, former CFO of Philips Electronics (PHG). Shares +19.0% premarket (7:00 ET).
  • Tax case widens as UBS looks for settlement. Sources say U.S. prosecutors are expanding their tax case against UBS (UBS), and that the number of U.S. clients that UBS helped to avoid taxes is potentially much higher than the previously disclosed estimate of 17,000. Investigators are also looking into assisted tax evasion in other parts of the bank besides for the wealth-management unit. UBS is said to be in talks with the Justice Department to avoid a possible felony indictment by admitting to criminal conduct and paying a $1.2B penalty. UBS has publicly denied any wrongdoing.
  • Tighter lending with TARP. Lending at major banks has fallen in recent months, despite large influxes of taxpayer money. Ten of 13 major TARP beneficiaries saw their outstanding loan balances decline by a total of around $46B from Q3 to Q4 2008, a 1.4% decline. Just three of the banks reported growth in their loan portfolios, namely U.S. Bancorp (USB), SunTrust Banks (STI) and BB&T (BBT). If TARP was meant to stimulate lending, 'it has failed,' says finance professor Campbell Harvey. "Basically we have dropped a huge amount of money... and we have nothing to show for what we actually wanted to happen."
  • French banks create mega fund firm. French banks Societe Generale (SCGLY.PK) and Credit Agricole will announce plans today to combine major sections of their asset-management operations to cut costs. The joint venture will have around €700B ($909B) in assets under management, with a 70% interest going to Credit Agricole and the rest to Societe Generale. The JV would rank among the world's ten biggest asset-management companies.
  • Business climate reaches new lows. The U.S. business climate is the worst in almost three decades. The National Association of Business Economics' [NABE] quarterly industry survey "depicts the worst business conditions since the survey began in 1982," with the majority of respondents expecting GDP to contract at a faster pace in 2009. 47% of respondents reported a fall in demand for goods and services, an all-time high. Job losses are expected to continue in the first half of 2009, notably so in sectors such as good-producing, finance, real estate, transport, utilities and communications.
Snuffysmith
Jan 26 2009, 12:37 PM
Economy

Snuffysmith
Jan 27 2009, 10:06 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Jilted Rohm files suit. Rohm & Haas (ROH) have filed a lawsuit against Dow Chemical (DOW) to force Dow to complete its $15.3B purchase of the specialty-chemicals company. Dow had announced on Sunday that it doesn't plan to complete the pending acquisition on or before the Jan. 27 deadline, sending Rohm shares down over 13% yesterday. Dow blamed 'the continued crisis in global financial and credit markets' and the collapse of a JV agreement with Kuwait that would have helped Dow finance the deal for making the closing 'untenable at this time.' Rohm's lawsuit blasts Dow for creating 'intolerable uncertainty' for shareholders, customers and suppliers.
  • Job loss avalanche. The global payroll lost over 76,000 jobs yesterday as major firms in the U.S. and Europe took additional steps to survive the worsening economic downturn. Leading the retreat were U.S. companies including Caterpillar (CAT) (20,000 job cuts), General Motors (GM) (2,000), Sprint Nextel (S) (8,000), Texas Instruments (TXN) (3,400) and Home Depot (HD) (7,000), while Pfizer (PFE) said around 19,500 jobs would be lost as a result of its mega-merger with Wyeth (WYE). If there's any silver lining to be found, strategists point out that major layoffs are often a late-cycle indicator.
  • Fannie/Freddie need more cash. Fannie Mae (FNM) and Freddie Mac (FRE) could tap up to $51B from the government in the coming weeks to continue operating, exceeding Wall Street estimates of how much the two entities would need. Rising delinquencies and falling securities values have accelerated, and both mortgage giants are facing Q4 losses. Fannie will likely ask the government to draw $11B-$16B under its $100B senior preferred purchase agreement, while Freddie could seek $30B-$35B. "Their losses are going to be much higher than anyone anticipated," analyst Paul Miller says, noting the GSEs were in the habit of classifying subprime and Alt-A loans as prime.
  • FDIC looks for new approach. The FDIC will meet today and is bringing some new proposals to the table, according to industry consultant Bert Ely. With banks failing at the fastest pace in 17 years, Ely says the FDIC will consider limiting the interest rates being offered by banks with less-than-adequate capital to prevent banks from paying too much to raise revenue. The FDIC may also limit certain banks on higher-cost sources of funding, including brokered deposits. With three banks closed in January so far, the FDIC must replenish its reserves, and is preparing to do so by doubling premiums.
  • AmEx hit by loan losses. Q4 earnings fell 72% at American Express (AXP) on higher loan losses, lower customer spending and a stronger U.S. dollar. The company said it will "remain cautious about the economic outlook through 2009, and expect cardmember spending to remain soft with past-due loans and write-offs rising from current levels," while CEO Kenneth Chenault called this "one of the most difficult operating environments we have seen in decades." Analysts expressed concern about whether the company was setting enough money aside to cover losses. (see earnings details below)
  • Siemens gets energy lift. Siemens (SI) reported an 81% drop in FQ1 profit after last year's sale of its automotive electronics division, but had an otherwise solid quarter on strong growth from its energy division. Profit dropped to €1.23B ($1.6B) from €6.48B after the asset sale, but 'total sectors profit' (measuring profit at the main industry, energy and healthcare divisions) rose 20% to €2B while revenue rose 7% to €19.63B. The company expects fiscal year total sectors profit to reach €8B-€8.5B. Shares +5.2% premarket (7:00 ET).
  • Geithner confirmation. As expected, Tim Geithner was confirmed as the new Treasury Secretary in a 60-34 Senate vote. Geithner promised quick action to help the economy. Sources say William Dudley will take over as president of the New York Fed.
  • Home sales jump. Existing home sales rose unexpectedly in December, jumping 6.5% to a seasonally adjusted 4.74M units vs. consensus of 4.4M. "The higher monthly sales gain and falling inventory are steps in the right direction, but the market is still far from normal balanced conditions."
  • Bump in leading indicators. Conference Board's Leading Indicators rose a surprising +0.3% in December, while economists expected -0.2%. Weakness in employment, building permits etc. were somewhat offset by "the continued and very large positive contribution from real money supply" and an improving yield spread.
Snuffysmith
Jan 27 2009, 10:08 AM
Economy

Snuffysmith
Jan 28 2009, 07:49 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • House readies to pass stimulus. Some Congressional committees have already approved certain sub-sections of Obama's stimulus plan (see stimulus factbox), but now the full House of Representatives is poised to approve the $825B stimulus, despite heavy opposition from many House Republicans. The Senate is likely to pass a slightly more expensive version of the stimulus plan, forcing the two chambers to work out their differences with the goal of presenting Obama a final bill to sign into law by mid-February. Republicans are concerned the bill won't create and maintain as many jobs as promised, and that the money would be spent over too long a period to be effective. Trying to garner broad bipartisan support, Obama signalled his willingness to yield to certain Republican priorities, including limiting the alternative minimum tax.
  • FOMC preview. The Fed wraps up two days of meetings today and will release its FOMC decision at 2:15PM. Since its traditional interest rate policy is already near zero, the key outcome of the meeting will be seeing what else the Fed has up its sleeve to spur U.S. growth. One likely option is to continue with credit-easing measures that have already doubled the Fed's balance sheet to over $2T. The Fed has also said it's weighing the possibility of major purchases or long-dated U.S. government securities. A less-likely possibility is that the Fed might choose to set an explicit and aggressive inflation target. Economists expect the Fed to hold its target interest rate at a range of 0%-0.25%.
  • NY AG asks Thain to explain bonuses. New York Attorney General Andrew Cuomo has subpoenaed former Merrill Lynch CEO John Thain and Bank of America's (BAC) Chief Administration Officer J. Steele Alphin regarding billions of dollars in bonuses paid by Merrill just days before its takeover. According to a statement released by the AG's office, the fact "that Merrill Lynch appears to have moved up the timetable to pay bonuses before its merger with Bank of America is troubling to say the least." Bank of America CEO Ken Lewis will likely be subpoenaed as well.
  • Bracing for a bad bank. Sources say Obama is close to finalizing plans for a bad bank, and an announcement could come as early as next week. There has been no word yet on how the government would price assets or pay for them. Sources point to the FDIC as a prime candidate for managing the bad bank. The move would come amid growing speculation that another bank bailout may be needed and in response to the increasingly popular government conclusion that preferred equity is not sufficient to make the banks healthy.
  • Santander makes amends with Madoff clients. Banco Santander (STD) will offer €1.38B ($1.82B) in preferred shares to private clients of the bank who lost money with Madoff. Santander will also close seven hedge funds run by its Optimal Investment Services unit after the Madoff scandal triggered a surge in withdrawal requests. Santander's concessions follow €2.33B of Madoff-related client losses and a lawsuit filed in a U.S. federal court accusing the bank of failing to adequately vet Madoff. The settlement could put pressure on other banks to reimburse their clients as well.
  • Yahoo rises on earnings beat. Yahoo (YHOO) gained over 5% in after-hours trading after the company posted better-than-expected Q4 earnings, due in part to job cuts and growing domestic sales (see details below). However, the company also reported its first quarterly loss since 2002. In the earnings conference call, new CEO Carol Bartz said she would consider offers to sell some of the company's assets, though she didn't come to Yahoo with the intention of doing so. The company provided a cautious Q1 sales outlook of $1.53B-$1.73B.
  • Toyota recalls. Toyota (TM) will recall over 1.35M cars worldwide to fix a defect in the seatbelt, a component in the exhaust system or both. The affected models include Vitz, Belta and Ractis cars. Toyota didn't disclose the estimated cost of the recall.
  • Canadian stimulus plan. Canada will inject C$40B ($32.6B) into its economy over the next two fiscal years through tax cuts and increased spending. "Since last fall, the global economic situation has deteriorated further, and faster, than anyone predicted," said Finance Minister Jim Flaherty. "We must do what it takes to keep our economy moving, and to protect Canadians in this extraordinary time."
  • U.K. auto aid. The U.K. will guarantee over £2B ($2.8B) in loans to support the country's auto industry. Peter Mandelson, the U.K. business minister, has also asked the government to help car companies' financing arms get access to credit, an effort that could include guaranteeing car-loan-backed securities.
  • Home prices plummet [.pdf]. S&P/Case-Shiller's home price index tumbled by a record 18.18% in November from a year ago, which was marginally better than the -18.4% economists expected. This marks the 28th straight month of declines in residential real estate.
  • Confidence at new lows. Conference Board's Consumer Confidence Index inched down to an all-time low of 37.7 from December's 38.6. Expectations dipped to 43.0 from 44.2. "Until we begin to see considerable improvements in the Expectations Index, we can't say that the worst of times are behind us."
  • Retail sales drop. Retail chain store sales fell 1.8% from a week ago, ICSC said, and dropped 2.4% Y/Y. "The presidential inauguration kept consumers home watching television coverage rather than in stores. As a result, weekly sales slipped sharply."
Snuffysmith
Jan 28 2009, 08:05 AM
Economy


Fed's Shift to Zero Rates Leaves Experts Blind, Complicates Bernanke Job Investors will have a tougher time assessing Federal Reserve policy when officials today replace interest rates with emergency credit programs as their main tool for steering the economy.

French Consumer Confidence Unexpectedly Rises, Helped by Slowing Inflation French consumer confidence unexpectedly rose to a nine-month high in January as slowing inflation gave shoppers some respite amid the worst recession since World War II.

House Set For Vote Today on $816 Billion Stimulus, Moving Debate to Senate The U.S. House is set to approve today President Barack Obama’s proposed $816 billion economic stimulus package aimed at wresting the economy out of recession through a combination of tax cuts and $604 billion in spending.

Soros Says He Stopped Betting Against Pound After Currency Fell to $1.40 Billionaire investor George Soros, who made $1 billion selling the pound in 1992, said he is no longer betting against the U.K. currency after it reached $1.40.

Italy Business Sentiment Falls to Record Low on Worst Recession Since 1992 Italian business confidence fell to a record low in January as the country sank deeper into its fourth recession in seven years.

SNB President Roth Says Franc Is Stable, Central Bank Keeping Close Watch Swiss National Bank President Jean- Pierre Roth said the central bank is watching the franc’s exchange rate “closely,” days after Swiss policy makers said they’re ready to intervene in currency markets to halt its appreciation.

Bank of England May Print Money, Buy Assets in Six Months, Barclays Says The Bank of England may need to buy assets and print money within the next six months as the U.K. Treasury works to rescue the economy from recession, according to Barclays Plc economist Simon Hayes.

Japan Finance Ministry Cuts View of Regional Economy as Recession Deepens Japan’s Finance Ministry lowered its assessment of the regional economy for a fourth straight quarter as companies cut production in the wake of a collapse in exports.

FDIC May Run `Bad Bank' in Obama Plan to Remove Toxic Assets, Spur Lending The Federal Deposit Insurance Corp. may manage the so-called bad bank that the Obama administration is likely to set up as it tries to break the back of the credit crisis, two people familiar with the matter said.

Gloom Deepens Among World's Chief Executive Officers, Davos Survey Shows Gloom is deepening among business leaders and economists, casting a pall over this year’s World Economic Forum in Davos, Switzerland.

New York City 2008 Securities Industry Bonuses Fell 44%: Table of the Day Following is a comparison of bonuses paid by Wall Street firms to their New York City employees. In 2008, bonuses fell 44 percent to $18.4 billion, an average of $112,020 per employee, according to New York State Comptroller Thomas P. DiNapoli.

Snuffysmith
Jan 28 2009, 08:06 AM
Dudley Brings Crisis Experience to Job as New York Federal Reserve Chief William Dudley, named president of the Federal Reserve Bank of New York today, kept up his stamina during last year’s all-night talks on the financial crisis by napping on the carpet of his office at the bank.

Fed Will Modify Mortgages Bought in AIG, Bear Rescues to Stem Foreclosures The Federal Reserve will ease terms on residential mortgages acquired in the rescues of Bear Stearns Cos. and American International Group Inc., seeking to stem foreclosures.

Fed Move Into `Uncharted Waters' Spurs Pressure to Overhaul Its Forecasts Federal Reserve officials are considering an overhaul of their economic forecasting, aiming to make clear their objectives for growth and inflation in the aftermath of the longest recession since the 1930s.

Snuffysmith
Jan 28 2009, 08:07 AM

AFPWorld economy may lose 51 million jobs
Reuters - 55 minutes ago
By Laura MacInnis GENEVA (Reuters) - Up to 51 million jobs worldwide could disappear by the end of this year as a result of the economic slowdown that has turned into a global employment crisis, a United Nations agency said on Wednesday.
UN: world unemployment could rise by 40 million International Herald Tribune
Global crisis could cost 50 million jobs Midas Letter
Snuffysmith
Jan 29 2009, 07:26 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • No surprises from FOMC. As expected, the FOMC kept its target range for the federal funds rate at 0%-0.25%, and said the rate is likely to stay at 'exceptionally low levels... for some time.' The committee noted that the economy has weakened since December, global demand is slowing substantially, credit remains tight and a gradual recovery may possibly begin later in 2009. In terms of policy, the Fed will continue to buy agency debt and is prepared to buy longer-term Treasurys "if evolving circumstances indicate that such transactions would be particularly effective in improving conditions in private credit markets." (Read the FOMC's press release)
  • Stimulus passes House with lopsided support. The House of Representatives approved Obama's $819B stimulus plan but without the broad bipartisan support the president had hoped for. Despite a week of trying to find common ground with Republicans, the bill passed 244-188 - without a single Republican vote and down 11 Democrats. As one Republican opponent put it, "the strategy under this bill is to throw billions of dollars in every bureaucratic direction, and cross our fingers and hope for the best." The size of the package and the long-term nature of some of its spending could push the deficit to 10%-12% of GDP, roughly double the previous peacetime record. The Senate will vote on their own stimulus bill next week.
  • Small steps towards TARP transparency. Under increased pressure from both taxpayers and elements of the government, the Treasury has said it will work to increase the transparency of its TARP program. Its first step is a promise to post all future TARP agreements with financial institutions on its website within 10 business days. Treasury's Geithner said doing so will allow taxpayers to see how their money is being spent. The Treasury has posted nine agreements on its website so far and other past agreements will be posted over the coming weeks. Separately, the Senate is working on a bill that would allow the Government Accountability Office access to the books and records of TARP recipients.
  • Bank bailout, part deux. Sources say a revamped bank rescue plan may be on the way and could cost as much as $1T-$2T. The Obama administration could make an announcement within days, but several details of the plan have yet to be determined, including the key issue of how to fix ailing financial institutions without ending up owning them. If a 'bad bank' is created, it could be seeded with $100B-$200B from TARP, with the rest of the $1T-$2T coming from the sale of government-backed debt or Fed borrowing. Despite a desire to avoid nationalizing banks, the government may buy commons shares of struggling institutions, while economists say the government probably can't avoid owning at least some banks for a temporary period.
  • CDS crackdown. Congress has been busy lately. Aside from working on the stimulus plan and TARP transparency, there is a movement underway in the House of Representatives to change how over-the-counter derivatives are regulated. The draft bill would ban credit-default swap trading unless investors owned the underlying bonds, potentially prohibiting as much as 80% of the trading in the $29T CDS market. The bill would also force U.S. trading in the $684T over-the-counter derivatives market to go through a central clearinghouse.
  • Credit union backstop. Government regulators moved to guarantee $80B of uninsured deposits at corporate credit unions and to inject $1B of new capital into the largest of these wholesale credit unions after an unexpected $1.1B loss on mortgage-backed securities. Credit unions are generally considered to be among the most conservatively managed financial institutions, but regulators wanted to minimize the chances of pain spreading, saying "we are trying to institute confidence in the system, and we think this will do so."
  • Mortgage apps plummet. Mortgage applications dropped 38.8% from a week ago, MBA reported, led by a 48% decline in refinances. 30-year fixed mortgages inched down 2bps to 5.22%.
Snuffysmith
Jan 30 2009, 08:26 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • NY AG mulls bonus pullback. Sources say New York Attorney General Andrew Cuomo may demand the return of $4B in early bonuses paid to Merrill Lynch employees just before being acquired by Bank of America (BAC). The AG's office is also looking into how much BoA CEO Ken Lewis knew about the accelerated bonuses, whether the companies' shareholders had all the necessary information about Merrill's finances and whether federal bailout loans to BoA were used properly. "No longer will this country stand for wasteful spending of tax dollars on bonuses for executives whose companies have taken huge losses and required taxpayer bailouts," Cuomo said. Obama echoed the sentiment, calling Wall Street bonuses 'shameful' and 'the height of irresponsibility.'
  • Pfizer's pull-out fee. Two days after Pfizer (PFE) announced its plans to buy Wyeth (WYE) for $68B, Pfizer shares are trading near a 12-year low. Perhaps, as one analyst put it, it's because "people seem underwhelmed by the deal, maybe thinking Pfizer made a safe move with Wyeth rather than trying to shoot the lights out with a more aggressive company better able to produce blockbuster drugs." Pfizer is moving forward with the deal full-force, and has committed to paying Wyeth $4.5B as a breakup fee if the lenders pull out of the deal. The lenders could choose to act if Pfizer's operations or credit rating decline significantly. Wyeth will have to pay $2B if it drops the deal to accept a higher bid from a different company.
  • Fannie tries for fewer foreclosures. Fannie Mae (FNM) has reached an agreement with former critic Neighborhood Assistance Corp. of America to help prevent foreclosures by modifying home loans. Bruce Mark, CEO of NACA, had previously called Fannie a 'major roadblock' to foreclosure-prevention efforts, but is now working to reach a similar agreement with Freddie Mac (FRE). NACA, which serves as an intermediary between borrowers and lenders and works with such major lenders as Bank of America (BAC) and Wells Fargo (WFC), helped modify over 20,000 mortgages last year.
  • Madoff transfers. Bank of New York Mellon (BK) will transfer $301.4M to Irving Picard, the trustee liquidating Madoff's brokerage, and JPMorgan Chase (JPM) will transfer $233.5M. In exchange, the banks will be indemnified against any claims brought as a result of the transfers. The move is part of Picard's efforts to gather assets to be returned to defrauded investors.
  • Roche lowers DNA bid. Roche Holding (RHHBY.PK) lowered its bid price for the 44.2% of Genentech (DNA) it doesn't already own to $86.50 per share from $89 per share, and will take the offer directly to shareholders within two weeks. Genentech had previously rejected Roche's $89/share offer as too low, and though the new bid is lower, it still marks a 2.9% premium on Genentech's recent closing price. A full takeover would allow Roche to cut costs, boost earnings and expand in the U.S. market.
  • Amazon profit beat. Amazon (AMZN) reported better-than-expected earnings yesterday (see details below), showing a 9% growth in Q4 profits and 18% growth in sales. The growth has much to do with Amazon's strategy of aggressive discounting, free shipping offers and continued product expansion at a time when most other retailers are scaling back, and CEO Jeff Bezos cited heavy demand for Amazon's Kindle electronic reader. Amazon also forecast strong sales for the current quarter.
  • Toshiba tossed by global recession. Toshiba (TOSBF.PK) fell the most in 34 years in Japanese trading after the company forecast its largest ever annual loss. Facing an industry glut and falling prices as the global economic downturn worsens, Toshiba's net loss will probably reach ¥280B ($3.1B) in the fiscal year ending March 31 vs. earlier estimates of a ¥70B net income. To save ¥300B in the next fiscal year, the company is delaying construction of new factories, firing temporary workers, slashing output and cutting research spending. In light of the lower earnings outlook and the possibility Toshiba might have to seek equity financing, Goldman Sachs cut its rating to Sell from Neutral. Shares -17.4% in Japan.
  • Dell smartphone? Dell (DELL) may move into the smartphone market as soon as next month, sources say, as a way to boost sales while its core PC business gets hit by the recession. At least one of Dell's models includes a touchscreen and no physical keyboard, like the iPhone (AAPL), while another has a keypad that slides out from beneath the screen. Going up against Apple and Research in Motion (RIMM) in the smartphone market would be a bold move, one that Dell has yet to confirm. "We haven't committed to anything," said one spokesman.
  • Japan's recession deepens. Japan's recession showed signs of deepening Friday, with closely watched industrial production plunging 9.6% in December, the second straight month of record decline, and projections of steep drops continuing into 2009. "I've never seen such a steep production fall," Economy Minister Kaoru Yosano said. Meanwhile, joblessness rose to 4.4% from 3.9%, and household spending fell by 4.6%. On Thursday, the government said Japan's economy entered a recession in November 2007, meaning it's been in recession for 14 months. Japan's recent expansion was fueled by exports, and economists say its current recession is being driven by the global downturn rather than domestic factors.
  • The Shedlock-Schiff Affair: A Chronicle. Popular econoblogger Michael "Mish" Shedlock triggered a firestorm this week when he took down outspoken investment advisor Peter Schiff, claiming that although Schiff may have been right about the U.S. economy imploding, clients who had invested in his funds in the hopes of profiting from his prophecies had seen their accounts decimated. Big Picture author Barry Ritholtz predicted Shedlock's post would set off fireworks "via a major media outlet." He was right. Today, WSJ's Right Forecast by Schiff, Wrong Plan? does exactly that. "Peter Schiff predicted a collapse of the U.S. financial system. The bust-up he didn't foresee was the one that made mincemeat of investors who took his advice in 2008." Meanwhile, Schiff responds, saying that "the crisis is just beginning and the movements thus far in the dollar, commodities, and foreign stocks, are mere head fakes. Once the speculators have been flushed from the markets, the underlying long-term trends I have been following should return in earnest."
  • More joblessness. Initial jobless claims remained elevated, with 588,000 this week after last week's (revised) 585,000 - vs. consensus of 575,000. Continuing claims +66.5K to 4.63M.
  • Durables drop. Durable Goods Orders -2.6% in December, worse than the 2% drop expected. November's numbers were revised to -3.7% from -1%. Ex-transport: -3.6% vs. -2.7% consensus. It's the fifth consecutive monthly decrease. Inventories +0.4% to $343.5B, the highest on record, and up 17 of the last 18 months.
  • Fewer new home sales. New home sales in December fell 14.7% to 331,000 from Nov. - well short of the 397,000 consensus. November was revised to 388,000 from 407,000. Median price $206,500 vs. $246,900 a year ago. Total new home sales for 2008: 482K down 37.8% from 776K last year.
Snuffysmith
Jan 30 2009, 08:27 AM
Economy

Snuffysmith
Jan 30 2009, 08:43 AM
U.S. Economy Shrinks at 3.8% Pace, Most in 27 Years, as Spending Crumbles The U.S. economy shrank the most since 1982 in the fourth quarter of last year as consumer spending recorded the worst slide in the postwar era, a trajectory that’s likely to continue in coming months.

Japan Heads for Worst Recession as Industrial Output Slumps, Losses Mount Japan headed for its worst postwar recession as factory production slumped an unprecedented 9.6 percent, NEC Corp. said it will cut more than 20,000 workers and Hitachi Ltd. forecast a record loss.

Europe Inflation Eases More Than Forecast to 1.1%, Unemployment Increases Europe’s inflation rate fell more than economists forecast to the lowest since the year the euro was introduced and unemployment rose for a fifth month, giving the European Central Bank more scope to cut interest rates further.

SNB's Roth Says He's Comfortable With Swiss Franc, Moves Aren't `Brutal' Swiss National Bank President Jean- Pierre Roth said he’s “comfortable” with the development of the Swiss franc and its moves haven’t been “brutal.”

U.K. Mortgage Approvals Stay Close to Decade-Low as Banks Ration Lending U.K. mortgage approvals stayed close to the lowest level since at least 1999 in December as banks rationed lending, deepening the property market slump.

Asian Finance Ministers Said to Plan Meeting on Currency Pool in February Finance ministers from Japan, China, South Korea and 10 Southeast Asian nations plan an unscheduled meeting next month to forge a pact to pool $120 billion of foreign exchange reserves to help defend their currencies.

Tyson Says Obama's Stimulus `Front-Loaded' to Aid U.S. Economy This Year Laura Tyson, an adviser to President Barack Obama during his election campaign, said the U.S. government’s stimulus measures are “front-loaded” to ensure they start bolstering the economy in 2009.

Home Prices Fell in 24 U.S. Cities in November as Foreclosures Intensified Home prices fell in 24 of 25 U.S. metropolitan areas in November from a year earlier as the recession and tighter lending spurred record foreclosures.

Roubini Predicts More Gloom for Global Economy After Vindication at Davos At the World Economic Forum two years ago, Nouriel Roubini warned that record profits and bonuses were obscuring a “hard landing” to come. “I really disagree,” countered Jacob Frenkel, the American International Group Inc. vice chairman and former Israeli central banker.

U.S. Economy Shrank Less Than Expected 3.8% in the Fourth Quarter: Table Following is a summary of Gross Domestic Product from the Commerce Department.

Snuffysmith
Jan 30 2009, 08:44 AM
Fed Says World Economy Weakening `Significantly,' Warns of Deflation Risk Federal Reserve officials warned of a prolonged global economic slowdown that may push the U.S. to the brink of deflation.

Fed Cuts Value of Bear Stearns, AIG Portfolios by 2.4% to $72.2 Billion The Federal Reserve marked down the value of investment portfolios acquired in the rescues of Bear Stearns Cos. and American International Group Inc. by 2.4 percent to $72.2 billion, adding to potential taxpayer losses from its bailouts.

Dudley Brings Crisis Experience to Job as New York Federal Reserve Chief William Dudley, named president of the Federal Reserve Bank of New York today, kept up his stamina during last year’s all-night talks on the financial crisis by napping on the carpet of his office at the bank.

Snuffysmith
Feb 2 2009, 08:42 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Getting tough on TARP. The Obama administration is expected to unveil new, stricter rules for banks receiving TARP aid, including restrictions on executive pay and increased lending requirements. Sources say the new rules could be announced some time this week, with Obama's new bank rescue plan following the week after. To improve public perception of the bailout, officials are also considering splitting TARP off from the Treasury and creating an independent entity.
  • Rio Tinto tempts Chinalco. Rio Tinto (RTP) is in talks to sell some of its assets to its biggest shareholder, Chinese government-owned Chinalco (ACH), in an effort to cut debt by as much as $8B. Rio is considering a combination of asset sales, convertible notes and share issues that would raise $15B in total and lift Chinalco's Rio stake to over 11% from 9%. The details of which assets are under discussion have not been revealed, but "for $8B, it's going to be something serious." Rio has close to $39B in debt, and last week sold a Potash project to Vale (RIO) for $1.6B. RTP +5.3% premarket (7:00 ET).
  • GM lobbies against heavy tax bill. After being promised $13.4B in emergency federal aid, General Motors (GM) may face a $7B tax bill as a result of the new restructuring plan it hopes to finalize by mid-February, which will likely include issuing outstanding stock to debtholders, the United Auto Workers union and the government. Sources say GM is trying to persuade lawmakers to amend the $819B stimulus package so the tax bill can be avoided, warning that a tax liability of that size could endanger GM's efforts to steer clear of bankruptcy.
  • Chrysler fights to stop sales slip. Chrysler is facing its own problems as it runs into unexpected resistance from former financing arm Chrysler Financial. Once a 'captive' lender, Chrysler Financial was split into a separate company in 2007 and, hurting from the financial meltdown, has been increasingly focused on its own bottom line. Chrysler Financial stopped offering auto leases last summer and cut back on auto loans, making it harder for Chrysler to lure customers as U.S. auto sales plunged. With a 53% drop in December sales, Chrysler is once again expected to be amongst the hardest hit when January's auto sales are released this week. A Chrysler spokesman acknowledged sales have suffered from "the reduction in competitive financing and leasing services available from Chrysler Financial as a result of the global credit crunch."
  • Shifting fortunes for RBS, ABN. Nationalized Dutch bank ABN Amro is in exploratory talks to buy back some of its former businesses from Royal Bank of Scotland (RBS). Dutch finance minister Wouter Bos confirmed there had been contact between ABN and RBS, but said the goal is not to re-create the same ABN that existed before being bought and broken up in 2007, but rather a 'new bank' that can be a 'major player.' The talks highlight a major reversal of fortunes for ABN and RBS; RBS is expected to report losses of £28B ($40B) later this month and is conducting a strategic review to see which operations it can sell.
  • Amylin faces calls for better management. Hedge fund Eastbourne Capital has nominated five directors for the board of Amylin Pharmaceuticals (AMLN) and is putting forward a slate by investors Carl Icahn. Eastbourne owns 12.5% of Amylin and said in a letter to management yesterday that the board needs to be 'significantly strengthened' and that Eastbourne has "lost confidence in Amylin’s leadership to take this rich product portfolio and execute an operational strategy that is in the best interest of the shareholders." Amylin shares have lost 64% in the last 12 months.
  • Panasonic's looming loss. Panasonic (PC) is set to post a ¥350B ($3.9B) annual net loss, sources say, its first net loss in six years. The electronics maker has been battling falling demand and rising costs, as well a strong yen cutting into overseas earnings. The company had previously forecast a net profit of ¥30B in November, a downward revision from a ¥310B projected profit.
  • Santander's Madoff payout faces court obstacle. Investors in Banco Santander's (STD) Optimal Equity Fund have asked a U.S. court to halt Santander's plans to compensate Madoff-hit investors with new shares. Before allowing the compensation plan to proceed, investors involved in the court movement want to determine whether Santander shared some responsibility for the alleged fraud. According to the suit, Santander's plan was 'coercive,' 'deceitful' and 'onerous.'
Snuffysmith
Feb 2 2009, 06:31 PM

Europe's bank falls into a false-logic trap
<http://www.ft.com/cms/s/0/0312acd8-f06d-11...00779fd2ac.html>
Wolfgang Münchau, Financial Times, 1 February 2009
To believe you can avoid a liquidity trap by not cutting interest rates is simultaneously dangerous and absurd, writes Wolfgang Münchau.

'Masters of the universe' must strike new tone
<http://www.ft.com/cms/s/0/80feda28-f067-11...00779fd2ac.html>
Simon Walker, Financial Times, 1 February 2009
The private equity industry needs to embrace fully the post-leverage era, by adopting a humbler tone and pursuing a policy of relentless openness, writes Simon Walker.

Bailouts for Bunglers
<http://www.nytimes.com/2009/02/02/opinion/02krugman.html>
Paul Krugman, Los Angeles Times, 2 February 2009
The plans for rescuing the banking system are shaping up as a classic exercise in “lemon socialism”: taxpayers bear the cost if things go wrong, but stockholders and executives get the benefits if things go right.

How Government Prolonged the Depression
<http://www.washingtonpost.com/wp-dyn/conte...ss=rss_opinions>
Harold L. Cole and Lee E. Ohanian, Wall Street Journal, 2 February 2009
Policies that decreased competition in product and labor markets were especially destructive.

Don't Push Banks to Make Bad Loans
<http://www.washingtonpost.com/wp-dyn/conte...ss=rss_opinions>
Bert Ely, Wall Street Journal, 2 February 2009
Contrary to myth, commercial bank lending is up. So are standards.

Asia's two recessions
<http://blogs.cfr.org/setser/2009/02/01/asias-two-recessions/>
Brad Setser: Follow the Money, 1 February 2009
The risk always was that exports and investment might turn down at the same time. And, alas, that indeed is what seems to be happening.

White House Talking Points
<http://gregmankiw.blogspot.com/2009/02/whi...ing-points.html>
Greg Mankiw, 2 February 2009
The White House view that government spending is a potent way to get out of a recession is, in essence, a bet on a theory. The theory might be right, but it is certainly one about which many economists have doubts.

NY Times Example of a Toxic Asset
<http://www.calculatedriskblog.com/2009/02/...oxic-asset.html>
Calculated Risk, 1 February 2009

Depression economics: Four options
<http://www.straitstimes.com/vgn-ext-templa...0000a35010aRCRD>
Brad DeLong, The Straits Times, 2 February 2009

Permanent vs. temporary increases in government spending, a Keynesian approach
<http://www.marginalrevolution.com/marginal...n-approach.html>
Tyler Cowen: Marginal Revolution, 2 February 2009
Snuffysmith
Feb 3 2009, 09:17 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Citi to boost lending. Under pressure to increase lending, Citigroup (C) plans to use $36.5B to issue mortgages, make credit card and other loans and buy distressed assets. According to CEO Vikram Pandit, "The government, on behalf of the American taxpayer, has invested in Citigroup. We have an obligation to repay in ways that go well beyond the $3.41B Citigroup will pay the government each year in dividends associated with its TARP investment." Citi also said it will not use TARP funds for bonuses, dividend payments, lobbying or marketing. Citi is also exploring the possibility of backing out of a nearly $400M marketing deal with the New York Mets.
  • How much did BoA know? Despite rumblings from Bank of America (BAC) that it didn't know Merrill Lynch planned to pay bonuses in December rather than January, former Merrill CEO John Thain said BoA knew about every aspect of the December payouts. Lending support to Thain's claim is a private bonus agreement both firms signed in September when BoA agreed to buy Merrill. The document shows both firms agreed the discretionary bonus pool shouldn’t exceed $5.8B billion, and that 60% should be awarded in cash and 40% in equity or long term cash awards. The agreement also said that the distribution of bonuses to eligible Merrill employees "shall be determined by the company in consultation with the parent." The parent, of course, being Bank of America. The PR battle between Thain and Ken Lewis in the media will likely continue, though one wonders whether BoA can really try to deny this latest claim.
  • Anxious UBS tried MS talks. UBS (UBS) discussed the possible sale of its U.S. brokerage division to Morgan Stanley (MS) late last year, sources say. The talks were preliminary and are unlikely to be revived, and though UBS is said to be no longer looking to sell the unit, it shows the dramatic steps the Swiss bank was willing to take to overhaul its business. The news will raise fresh questions about UBS's stratetegy as the bank suffers from credit-related losses and a U.S. tax investigation.
  • Cheap oil hurts BP. BP (BP) swung to a Q4 loss as the global slowdown pulled down oil prices along with demand (see earnings details below). CEO Tony Hayward said the 'depressed' results mainly reflected the dramatic fall in crude oil prices and adverse effects from non-recurring events, notably a $700M loss at Russian joint venture TNK-BP Ltd. due to a time-lag on excise duty and other impairments. The company's clean replacement costs of supplies, a figure that strips out gains or losses from inventories and exceptional items, was $2.61B vs. consensus of $5.01B. Cash flow from operations will balance with spending at an oil price of $50-$60 per barrel.
  • BoJ buyback scheme. Bank of Japan will buy ¥1T ($11.1B) of shares owned by Japanese banks to stabilize the financial system. The central bank will purchase stocks until April 2010, reviving a plan used more than four years ago when Japan was dealing with a domestic banking crisis. BoJ Governor said the biggest risk facing Japanese banks "is not credit risk. It's volatility in share prices."
  • Aussie rate cut, spending boost. Australia's central bank cut its benchmark rate to 3.25%, its lowest level in 45 years. The government also announced plans to spend an additional A$42B ($27B) to fight recession, with A$12.7B earmarked as handouts for families and A$28.8B for infrastructure spending.
  • Sad stats of the day. According to real estate data service Zillow.com, the U.S. housing market lost $3.3T in value last year, and $1.4T in the fourth quarter alone. Nearly one in six homeowners with mortgages owe more on their home loans than the homes themselves are worth. Home values have fallen for eight straight quarters. "Negative equity will trigger new foreclosures, and that will add to inventory and depress prices."
  • Personal income and outlays. Personal spending fell 1.0% in December, slightly worse than the -0.9% expected. Personal income was down 0.2% ($25.3B) vs. -0.4% consensus. Personal saving rose to 3.6%, the highest since May. But income and spending are worse than they sound, if you bear in mind December's data includes the Christmas shopping bump.
  • ISM mfg index. The ISM Manufacturing Index came in at 35.6 in January, the 12th consecutive month of contraction. The only industries reporting growth were textiles and petroleum & coal products. Nonmetallic mineral products and electrical equipment led the laggards.
Snuffysmith
Feb 3 2009, 09:18 AM
Snuffysmith
Feb 4 2009, 08:07 AM
Obama Orders $500,000 Pay Cap for Executives at Companies Getting Most Aid President Barack Obama will announce today that he’s imposing a cap of $500,000 on the compensation of top executives at companies that receive significant federal assistance in the future, responding to a public outcry over Wall Street excess.

Toxic-Asset Guarantees Gain Momentum in Negotiations to Rescue U.S. Banks The Obama administration, aiming to overhaul the $700 billion financial-rescue program, is refocusing on an effort to guarantee illiquid assets against losses without taking them off banks’ balance sheets.

U.S. Companies Cut 522,000 Jobs in January, Fewer Than Estimated, ADP Says Companies in the U.S. cut an estimated 522,000 jobs in January as the economy weakened at the start of the year, a private report based on payroll data showed today.

Citigroup, Pressured by FDIC After Bailout, Expands Mortgage-Relief Effort Citigroup Inc., the U.S. bank forced to curb executive pay and slash stock dividends as a condition of its $346 billion bailout, now has to expand the use of a government mortgage-relief program to meet regulators’ demands.

Costco Sees Profit `Substantially Below' Estimates After Reducing Prices Costco Wholesale Corp., the biggest U.S. warehouse-club chain, said profit will be “substantially below” analysts’ estimates after the company cut prices to keep customers as the recession deepens.

Service Industries in U.S. Probably Shrank at Faster Pace as Spending Fell Service industries in the U.S. probably contracted at a faster pace in January as mounting unemployment caused consumers to retrench, economists said before a report today.

Snuffysmith
Feb 5 2009, 07:46 AM
US Market

Snuffysmith
Feb 5 2009, 07:48 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Profits amiss, Swiss Re gets Buffett boost. Warren Buffett's Berkshire Hathaway (BRK.A) will invest around 3B Swiss francs ($2.6B) in Swiss Reinsurance (SWCEY.PK) to help the firm raise its capital levels and protect its AA credit rating. In return, Swiss Re will issue a bond with a coupon of 12% which can later be converted into shares, potentially giving Berkshire a stake of over 20% in the world's second-biggest reinsurer. Swiss Re, which has suffered heavy losses from its credit default swaps exposure and wrote down 6B Swiss francs in toxic assets, expects to post a net loss of around 1B Swiss francs for 2008 and may eventually seek another 2B Swiss francs in addition to Buffett's capital injection. The company will also cut its dividend and disband part of its asset-management unit. CEO Jacques Aigrain said the company was "disappointed with our overall results in 2008," but that Buffett's investment "is a testament to the strength of our franchise." Shares -16.6% in Switzerland (7:00 ET).
  • Buy American, sort of. The Senate has softened the 'Buy American' plan in its $900B stimulus bill after Obama expressed concern that the original language could trigger a trade war. The new amendment requires the Buy American provision to be "applied in a manner consistent with U.S. obligations under international agreements," providing some relief to Canada, Mexico, the EU and other major trading partners. Some Senators went even further, trying to remove the Buy American provision altogether, but failed to garner the necessary votes. McCain, an opponent of the provision, warned it has "echoes of the disastrous Smoot-Hawley tariff act... It sends a message to the world that the United States is going back to protectionism." Meanwhile, many foreign firms, trying to win a piece of the stimulus package, are increasing their American presence.
  • Watchdog calls for government investment strategy. According to a report issued today by a government watchdog, the U.S. needs to develop an investment strategy for its recently acquired holdings. To date, the U.S. government has collected over $271M in dividends from ownership stakes in American banks and holds $279.2B in preferred shares from 319 financial institutions, as well as common stock warrants from 230 institutions. The report also raised questions about potential fraud issues in the Fed's Term Asset-Backed Loan Facility (TALF).
  • Parts suppliers want part of bailout. U.S. auto-parts makers are seeking up to $25.5B in federal aid as the auto industry gets slammed, forcing broad production cuts among automakers. Suppliers are asking for $8B in direct federal loans, $7B to flow through automakers so suppliers can be paid in ten days instead of the traditional 45, and $10.5B to guarantee receivables of suppliers whose customers have taken federal loans. Without immediate aid, industry representatives say hundreds of parts suppliers will close or file for bankruptcy.
  • Revolving door for Volvo. Looking for cash to avoid a federal bailout, sources say Ford (F) is in talks to sell its Volvo unit to China's Geely Automobile Holdings. Ford has also approached two other Chinese automakers, and will likely recoup less than the $6.4B it paid for Volvo in 1999. The U.S. automaker has already received commitments from Export-Import Bank of China to provide the necessary financing for an acquisition. Ford creditors would likely receive some or all of the proceeds from a Volvo sale.
  • P&G gamble on getting out of pharma. Procter & Gamble (PG) is looking to exit the pharmaceutical business, and has hired Goldman Sachs (GS) to identify possible buyers for its pharmaceutical brands. P&G's pharma unit accounts for global sales of over $2B. The company announced in December that it had stopped investing in new drug development, citing the need to create 'maximum value' for shareholders.
  • Cisco profit chill. Cisco (CSCO) posted a 27% drop in FQ2 earnings on weaker sales and higher costs, though the firm still managed to report slightly better figures than Wall Street expected (see earnings details below). Cisco also issued a disappointing sales forecast for the current quarter, forecasting a 15-20% drop from last year, or roughly $7.8B-$8.3B less. Analysts had expected sales of about $8.7B. CEO John Chambers expressed optimism about the company, telling analysts "this downturn, in my opinion, is both the biggest challenge of our lifetime, but also represents the biggest opportunity to transform our company as well as our economy through a series of bold steps." (Read the earnings call transcript.)
  • Overseas credit use lifts Visa. Profit rose 35% at Visa (V), thanks to a gain in non-U.S. consumers using credit and debit cards (see earnings details below). CEO Joe Saunders said Visa is 'steadfast' in its guidance that EPS will rise at least 20% this year, highlighting the company's "processed transaction growth, the strength of debit, and the global diversity of our business." Total volume rose 44% in Central Europe, the Middle East and Africa, 27% in Latin America and the Caribbean and 20% in the Asia-Pacific region vs. just 7.1% growth in the U.S.
  • Congressional hearings on Madoff. Harry Markopolos testified before Congress yesterday, slamming the SEC for 'financial illiteracy' on the Madoff case and for 'an abject failure by the regulatory agencies we entrust as our watchdog.' Markopolos also lodged a serious accusation against the Wall Street Journal, saying "I believe that senior editors of the [Wall Street] Journal respected and feared Mr. Madoff" and wouldn't allow senior investigative reporter John Wilke to pursue the matter when contacted in December 2005. (Read Markopolos' full testimony - .pdf)
  • Job cuts soar. According to Challenger, firing announcements rose an astounding 222% last month from January 2008, to 241,749. "Even if the stimulus package is successful, it could take months to make a noticeable impact on the employment picture. There is no light at the end of the tunnel." ADP reported nonfarm employment decreased 522,000 in January, a drop less than the 535K consensus. The goods-producing sector declined for the 24th consecutive month. Employment in the manufacturing sector fell for the 28th time over the last 29 months.
  • Online recruiting weakens again. Monster's online employment index dipped 13 points in January to 118 as online recruiting slowed for the fourth straight month. It's down 26% from a year ago - a more negative pace than the previous three months, suggesting further deterioration in labor market conditions. Arts, entertainment, and recreation remains the weakest trending industry, indicating further softening in consumer leisure spending activity. "The fact that employers have chosen to begin recruiting in 2009 on a cautious note is not surprising given the uncertain nature of the global economy," it said.
  • Non-mfg sector contracts. Economic activity in the non-manufacturing sector contracted in January, registering 42.9% on the ISM Index vs. December's 40.1%. This was the fourth month in a row of sector contraction, though the rate has slowed slightly.
  • BoE rate cut. The Bank of England cut its key lending rate to 1% from 1.5%, as expected. BoE has brought its rate down from 5% in October as the world economy worsened and the U.K. slipped into recession.
Snuffysmith
Feb 6 2009, 08:03 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Financial rescue plan en route. The Obama administration is expected to announce a comprehensive financial rescue plan on Monday, including a strategy to deal with banks' bad assets and a new program to help prevent home foreclosures. Treasury's Geithner will unveil the plan in a speech detailing both new initiatives and plans on how to use the second half of TARP funds. Sources say financial rescue efforts are shaping up to include increased capital injections with tougher terms and expanded Fed lending through TALF. Geithner will likely place emphasis on guarantees of toxic assets as opposed to a classic 'bad bank' proposal.
  • Cautious hope on Senate stimulus. Democrats in the Senate will try again today to pass their $937B economic stimulus plan while moderates are trying to rein in some of the proposed spending. A bipartisan group of around 18 Senators worked late last night trying to slice around $107B from the plan, while Obama has kept the pressure up to have a copy of the bill on his desk by Feb. 16. Senate Majority Leader Harry Reid said he was 'cautiously optimistic' they could finish up by today.
  • TARP shortchanged taxpayers. A watchdog Congressional panel reported that TARP has shortchanged U.S. taxpayers by around $78B; the Treasury received bank assets worth around $176B in exchange for capital purchases of $254B. Representative Alan Grayson calls the loss estimate 'conservative,' warning "it could turn out that those assets in the end are worthless." Paulson had previously justified the exchange, saying "this is an investment, not an expenditure, and there is no reason to expect this program will cost taxpayers anything." So far, AIG (AIG) and Citigroup (C) have provided the least value, providing securities worth $41 for every $100 of government money they received.
  • Profit outlook drives Toyota downgrade. Toyota (TM) lost its top credit rating from Moody's with a downgrade to AA1 from AAA, driven primarily by the "significantly impaired state of profitability at Toyota, due in turn to the severe nature of market conditions surrounding the global auto industry." S&P also lowered its credit rating for Toyota, to AA+ from AAA. The cuts may drive up borrowing costs for the automaker, which posted a FQ3 net loss today and warned of a larger-than-expected full year loss (see details below). Toyota had been the only non-financial, non-government borrower in Asia with an AAA rating.
  • New bank plan: I.V. drip. Federal officials are looking at ways to convert government stakes in U.S. banks - currently preferred stock - into common shares bit by bit in order to increase banks' common equity, sources say. "The point would be to provide a drip-feed of additional common equity as needed to cover losses – without the government owning a larger stake in the banks than is necessary." Under the proposal, shares would automatically morph into common equity if a bank's financial health breached a certain threshold.
  • Fannie bends the rules. In an effort to break the logjam in mortgage refinancing and allow homeowners to take advantage of record low rates, Fannie Mae (FNM) is bending the rules - dropping credit-score requirements, ignoring income-documentation standards, and waiving the need for appraisals. A Fannie Mae spokesman said the program 'will streamline' refinancing 'for potentially millions of current mortgage holders.'
  • RBS about-faces on insurance. Ten months after announcing plans to sell its insurance business, Royal Bank of Scotland (RBS) had decided to keep the unit after all. In an about-face, the board decided that the insurance business has "a clear competitive advantage, credible future growth opportunities from strong customer franchises" and can "generate appropriate risk-adjusted returns." The bank had initially hoped to sell the insurance unit for £7B ($10B) but analysts valued the business substantially lower as equity markets sagged and debt financing became scarce.
  • Tough times for News Corp. News Corp. (NWS) posted its largest ever quarterly loss after writing down $8.4B for the value of its Dow Jones acquisition (see earnings details below). Even excluding the charge, results fell short of analyst expectations as the company's ad sales were further weakened by recession and the poor economy hurt the company's other properties. CEO Rupert Murdoch said it's impossible to be completely prepared for an economic downturn as bad as this one, but that the company is working to cut costs in anticipation of a further slide in ad sales.
  • Insider-traders get caught. Several individuals, including a UBS (UBS) banker, have been criminally charged as part of an insider-trading ring that allegedly earned over $7M in illegal profits. The ring, which shared information on mergers and acquisitions, also includes former employees from Jefferies Group and Blackstone Group (BX). Several arrests have been made.
  • Obama on economy. In a Washington Post op-ed, Obama explains the pressing need to act: "If nothing is done, this recession might linger for years. Our economy will lose 5 million more jobs. Unemployment will approach double digits. Our nation will sink deeper into a crisis that, at some point, we may not be able to reverse."
  • Same store sales slip. Most retailers reported weak same-store sales in January as consumers cut back even more on discretionary spending. Sales for the industry as a whole fell 1.6%. A notable exception was Wal-Mart (WMT), which posted a 1.5% gain for the month, or 2.1% excluding fuel. Still, while the results were dismal, they weren't apocalyptic, with the majority of retailers exceeding consensus estimates, sending Retail HOLDRS ETF (RTH) up 4.9%.
  • Jobless claims spike. Initial Jobless Claims reached 626,000 vs. 580,000 consensus. Last week's claims were revised to 591,000 from 588,000. Continuing claims climbed 20,000 to 4,788,000.
  • Factory orders fall. December's factory orders fell 3.9% vs. -3.0% consensus, the fifth consecutive month of declines. Net of transportation, orders fell 4.4%.
  • ECB holds steady. The ECB left its key rate unchanged at 2%. Trichet signalled a 50 bps rate cut for next month's meeting.
Snuffysmith
Feb 6 2009, 08:04 AM
Snuffysmith
Feb 7 2009, 08:41 AM
Snuffysmith
Feb 9 2009, 07:36 AM

Wall Street Breakfast: Must-Know News
by SA Editor Rachael Granby



  • Geithner, Obama wait for Senate stimulus. Obama has postponed unveiling his financial recovery plan until tomorrow to allow Congress to give its full attention to the stimulus debate today. Obama stressed the importance of rapid passage in the Senate, and then rapid merger between the House and Senate versions of the bill. Economic adviser Lawrence Summers added "ninety percent of these bills are essentially overlapping" and urged lawmakers not to focus on "the bit of difference." Senate Democrats expressed confidence they can push for a vote on the amended $827B stimulus bill, and will likely do so today. Tomorrow, Treasury's Geithner will announce the administration's plans for the second half of TARP funds, plans that are expected to include efforts to draw private investment back into the economy, as well as help for homeowners.
  • No sun at Nissan. Hurting from slumping demand and a strengthening Yen, Nissan (NSANY) said it will cut 20,000 jobs, or 9% of its workforce, will cut production and will post its first loss in nine years. It also eliminated its H2 dividend, may shorten its work week to four days and is seeking a U.S. federal loan under a program for fuel-efficient autos. The company is forecasting a net loss of ¥265B ($2.91B) for the fiscal year ending March 31, compared with earlier forecasts for a ¥160B net income. Sales in the U.S., Nissan's biggest market, fell 31% in January, as CEO Carlos Ghosn warned "our worst assumptions on the state of the global economy have been met or exceeded." He cited declining consumer confidence and tight credit as "the most damaging factors." Shares closed -5.8% in Japan.
  • Forced bankruptcy possible for GM, Chrysler. The U.S. government has hired a law firm with bankruptcy expertise to provide advice on how to restructure General Motors (GM) and Chrysler. The two carmakers may have to be forced into bankruptcy to assure repayment of $17.4B in government loans, as U.S. taxpayers currently take a back seat to prior creditors including Citigroup (C), JPMorgan Chase (JPM) and Goldman Sachs (GS). Federal officials are working to change their place in line for repayment, but failing to do so, could make bankruptcy a requirement of any additional aid.
  • Mortgage rescues on the way? Sources say the Obama administration is creating a mortgage-rescue program that would have Fannie Mae (FNM) and Freddie Mac (FRE) ease payments for hundreds of thousands of borrowers, creating a model for Wall Street firms to replicate. Officials were working with Fannie and Freddie to agree on standards for who would be eligible for relief and how to get other companies to follow suit with similar plans. Industry sources say efforts thus far by Fannie and Freddie to rewrite home loans have been a disappointment, while officials in Obama's administration believe as many as 1.5M people could remain in their homes this year if their loans were modified.
  • Barclays beats consensus. Barclays' (BCS) H2 profit rose by more than analysts expected, buoyed by one-off gains from the purchase of Lehman assets and the sale of an insurance unit. Net income rose to £2.66B ($3.9B), up 49% from the year before, vs. analyst estimates of £2.05B. For the full year, net income declined less than 1% to £4.38B. Barclays will scrap 2008's final dividend to help the bank meet new capital requirements in the U.K. The bank reported its results more than a week ahead of schedule in an attempt to clamp down on losses speculation that has pushed down the company's share price. Shares +9.5% premarket (7:00 ET).
  • Swiss banks set for heavy losses. According to Swiss media reports, UBS (UBS) and Credit Suisse (CS) will post massive 2008 losses of 21B Swiss francs ($18B) and 8B Swiss francs ($6.9B). UBS is expected to announce the loss tomorrow, and if reports are correct it will mark the largest loss in Swiss history. UBS will also announce 5,000-8,000 new job cuts in addition to the 9,000 cuts already planned. Credit Suisse will announce its annual results on Wednesday.
  • Rio loses its director. Rio Tinto (RTP) director Jim Leng has quit and will not become chairman as previously planned after objecting to a deal with top shareholder Chinalco (ACH). Leng disagreed with how to cut Rio's heavy debt load of around $39B, after the company held talks last week with Chinalco about selling it convertible notes and stakes in some assets. Leng was named as Rio's next chairman less than a month ago. Rio shares -6.9% premarket (7:00 ET).
  • Using the D-word. The world's advanced economies are "already in depression," at least according to IMF chief Dominique Strauss-Kahn. The "worst cannot be ruled out," he said, adding that the IMF could further cut its global growth forecasts. Strauss-Kahn's remarks are markedly more pessimistic than IMF forecasts released as recently as Jan. 28.
Snuffysmith
Feb 9 2009, 07:39 AM
US Market

Snuffysmith
Feb 9 2009, 08:19 AM
Obama Calls Recession a Disaster
- BBC 2/6/2009
GE Chief Warns on US Depression Threat
- Financial Times 2/6/2009
Jobless Rate Jumps to 7.6%, 598K Jobs Lost
- Associated Press 2/6/2009
Furlough Fridays Begin for CA State Workers
- Seattle Times 2/6/2009
Bailout Overpaid $78B For Stocks
- CBS News 2/6/2009
Ford May Need to Put $4B Into Pension, Spurring Aid
- Bloomberg 2/6/2009
As Layoffs Surge, Women May Pass Men in Job Force
- New York Times 2/6/2009
Retailers Fighting for Survival
- Denver Post 2/6/2009
Crimes of Desperation
- Indianapolis Star 2/6/2009
Factory Orders Drop 3.9% in December
- Los Angeles Times 2/6/2009
Auto Suppliers’ Ind. Aid Request May Reach $25B
- Bloomberg 2/6/2009
Boeing Suffers Drop in Orders for Commercial Jets
- Chicago Tribune
Snuffysmith
Feb 9 2009, 08:49 AM
U.S. Delays Finance Plan as Officials Debate Debt

  • Bloomberg
  • 02/09/2009 04:56 AM
Congress Is Divided Over Competing Stimulus Bills

  • NY Times
  • 02/08/2009 05:28 AM
Obama's economic recovery plan on track in Senate

  • AP
  • 02/07/2009 05:30 AM
Stimulus Pitch Absorbs Agenda

  • Washington Post
  • 02/09/2009 04:57 AM
Fed Lacks Consensus on Treasury Purchases Even as Yields Climb

  • Bloomberg
  • 02/09/2009 04:44 AM
US plan to curb mortgage rates falters

  • FT ($)
  • 02/09/2009 04:43 AM
In Florida, Despair and Foreclosures

  • NY Times
  • 02/07/2009 06:53 PM
IMF Says Advanced Economies Already in Depression

  • Bloomberg
  • 02/07/2009 05:39 AM
Breaking Down The Stimulus Bill

  • CNBC
  • 02/07/2009 05:38 AM
Furloughs in California Close Many Agencies

  • NY Times
  • 02/07/2009 05:25 AM
Job losses at small companies could reach 2 million by 2010

  • LA Times
  • 02/09/2009 04:58 AM
Snuffysmith
Feb 9 2009, 08:53 AM
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